The Satisfying Reaction to Rising EpiPen Costs

Though it certainly wasn’t the only perpetrator of exorbitantly rising drug prices, pharmaceutical giant Mylan came under fire two years ago for its particularly egregious price hike. According to CBS News, the cost of EpiPen—a fast-acting epinephrine auto-injector to treat severe allergic reactions—soared from $103.59 in 2009 to over $600 by 2016.
 
What followed was, unsurprisingly, public outrage. Mylan CEO Heather Bresch only fueled the fire during a September 2016 Congressional hearing over the rising price, saying the company didn’t anticipate the public outcry. Lawmakers were quick to vilify her.
 
“What did you think was going to happen?” then-House Oversight and Government Reform Committee Chair Jason Chafetz (R-UT) asked.
 
“Yet another drug company has jacked up the price of a lifesaving product for no discernible reason,” said Rep. Elijah Cummings (D-MD), the committee’s top-ranking Democrat.
 
Rep. Stephen Lynch (D-MA) added, “It’s disgraceful what’s going on here. I think it’s disgusting.”
 
Further damning, NBC News reported last August that Bresch received an enormous salary bump—her compensation went from $2.45 million in 2007 to $18.93 million in 2015. Salaries for Mylan’s other execs ballooned as well: In 2015, president Rajiv Malik’s base pay increased 11.1 percent to $1 million, and chief commercial officer Anthony Mauro’s jumped 13.6 percent to $625,000.
 
The reason for the increase, Bresch told CBS News, was because Mylan wanted to make the life-saving device more accessible. She was also quick to dilute the news with Mylan’s philanthropic efforts.
 
“…we realized there was an unmet need…and so we made a conscious decision, the board, we put a business plan together to invest, to build public awareness and access,” Bresch said. “We’re now in over 70,000 schools across America. We’ve donated more than 800,000 free EpiPens…and remember that that price incorporates the entire supply chain. But it was that investment over the last eight years that would allow us to reach patients and save lives.”
 
In response to the criticism, last January, Mylan introduced a generic injector pen for $300, half the price of EpiPen. More concerning was that Mylan had a virtual monopoly on the device at the time after its chief competitor Auvi-Q launched a recall in fall of 2015. With no reliable alternatives, allergists could only prescribe EpiPen.
 
“This brand name, EpiPen, it’s like Kleenex to allergists,” Bloomberg senior reporter Robert Langreth told CBS News. “You know, it’s a name they know and trust. It’s what they prescribe.”
 
However, that’s all about to change. In mid-August, the FDA approved the first generic version of EpiPen and EpiPen Jr., manufactured by Israeli generic manufacturer Teva Pharmaceuticals. It was the latest in the FDA’s new Competitive Generic Therapy approval pathway, created to expedite development and review of a generic drug for products lacking competition.
 
“[The] approval of the first generic version of the most-widely prescribed epinephrine auto-injector in the U.S. is part of our commitment to advance access to lower cost, safe, and effective generic alternatives once patents and other exclusivities no longer prevent approval,” FDA Commissioner Scott Gottlieb, M.D., said.
 
The Auvi-Q alternative also returned to the market this year after resolving the malfunctioning issue. According to CBS Chicago, this time they are free, provided the patient has proper insurance or makes under $100,000 annually. However, it cannot be found yet at Walgreens or CVS Pharmacies, and isn’t necessarily covered. 
 
Adrenaclick is yet another alternative receiving attention since EpiPen’s price hike. Its maker also offers a cheaper, generic version of the injector pen. But both it and Auvi-Q have slightly different designs and are not authorized copies of the EpiPen. EpiPen is also the most user-friendly of the auto-injectors—for EpiPen, users remove one blue safety cap, then inject into the thigh. To use generic Adrenaclick, users must remove two gray caps, then press the red injector tip into the outer thigh.
 
“These products can be hard to copy, and therefore sometimes don’t face timely generic competition once patents and exclusivities are no longer a block to approval,” Gottlieb told NBC News upon the approval of Teva Pharmaceutical’s generic EpiPen.
 
Adding to the drama, prior to Teva’s approval in early August—and following a 5 percent slide in second-quarter revenue, and 87 percent Q2 U.S. GAAP diluted earnings fall—Mylan said it is forming a “strategic review committee” to weigh various alternatives to unlock the “true value” of the company. In business parlance, that could mean the company might be sold or broken up. The company also blamed “negative trends and dynamics playing out in the U.S. marketplace—which we believe are unsustainable for the healthcare system over the long-term but which we believe Mylan is uniquely well positioned to successfully weather and navigate.”
 
Whether those negative factors refer to the uncertainty of where healthcare legislation is headed or EpiPen’s struggles with a new competitor, something will undoubtedly be afoot concerning this particular medical segment’s price points. 
 
To put a cap on it all, in late August, U.S. Sen. Richard Blumenthal (D-CT) proposed price gouging legislation that would enforce a special FDA review when a drug’s price increases 10 percent in one year. State lawmakers passed a similar law this year that requires drug makers to justify price hikes above 20 percent. Blumenthal intends to introduce his bill in September.
 
“Other countries are able to manage the costs much better than we can here in the United States,” allergist Dr. Leslie Coleman told News 12 Connecticut. “I think there has to be more oversight along the lines of what Sen. Blumenthal wants to do.”