Why Did Mylan Hike EpiPen Prices 400%? Because They Could
Mylan pharmaceutical company has a virtual monopoly on EpiPens after a voluntary recall felled their only competitor, Sanofi’s Auvi-Q, over possible dosage miscalibrations. It’s not the drug being delivered that brings the bucks, though—epinephrine’s a cheap generic. The cost trickery is in the delivery system, the Mylan EpiPen.
The EpiPen’s been around since 1977, but Mylan acquired the autoinjector—which precisely calibrates the epinephrine dosage—in 2007. The patient now pays about 400% more for this advantage to receive a dollar’s worth of the lifesaving drug: EpiPens were about $57 when Mylan acquired it. Today, it can empty pockets of $500 or more in the US (European nations take a different approach to these things).
It’s what the market will bear, so what’s the problem, right? Only this: Somewhere, right now, a cash-strapped parent or budget-limited patient with a severe allergy will skip acquiring an EpiPen. And someday, they will need it in a life-threatening situation involving exposure to a trigger … and they won’t have it. And they will die. Because they couldn’t afford the delivery mechanism for $1 worth of a drug to keep them alive. Two turning points, a death, and one company at the crossroads.
According to NBC, Mylan’s profits from selling EpiPens, which they have aggressively, famously marketed with brilliant success, hit $1.2 billion in 2015. That year, Bloomberg reported that the epinephrine-delivery system represented 40% of Mylan’s operating profits. Bloomberg calls Mylan’s marketing of the EpiPen “a textbook case in savvy branding.”
That savvy comes at steep and increasing individual cost. Even after insurance pays, the customer can be out $400 or more for a pack of two pens, a dollar value that can vary depending on how high the deductible is. And most customers need two because they need one for home and one to have at school for their child. Indeed, guidelines call for prescribing two doses, which Mylan used as an opportunity to cease selling single pens and begin selling only two packs.
The coup d’grace that will divide the “have intervention for anaphylaxis” from the “have nots and might die as a result”? The EpiPens have an expiration date of one year. So if you don’t have a life-threatening allergic reaction within that year, that’s obviously a good thing—except that you’re out $400 or more and have to spend $400 more for that special device that delivers $1 worth of drug. One respondent to a Facebook query I made about EpiPens noted:
As a school nurse my mom dealt with families who faced this. Sometimes they’d get the prescription filled and the expiration date would be only a few months away- not even long enough to get through a school year. So families would have to buy multiple per school year. (And the school wanted 2 per kid)
Another commenter said:
My mom stopped carrying hers because her insurer won’t pay for it.
In the US my sister got one. After insurance paid their bit it was $600.
One MD who responded said:
i have a mom who has to pay full price because of a high deductible plan.
Do you have to have the pen to deliver the drug? No. It’s possible to use a syringe, which is exactly what some consumers are doing, along with some emergency medical technicians—the first responders for an anaphylaxis call when the affected person doesn’t, you know, have an EpiPen.
What’s wrong with that? A syringe doesn’t offer the benefit and safety advantage of a well-calibrated dose, and it carries the risk of injection into a vein, instead of muscle, which can be fatal. PBS reported the experience of one mother whose son has an extreme dairy allergy and whose insurance plan is high deductible. The price of two pens–$1212—was more than her mortgage payment, so she turned to ampules of epinephrine and a syringe as the “rescue” med for her son. Her older son, PBS reports, who also has allergies, just carries around expired EpiPens.
Mylan has tried to save some face—and probably preclude some of the widespread blowback building up with back-to-school stories—by offering a program, the “$0 co-pay card,” but Marketwatch says that only decreases what the consumer spends by $100, so the “$0 pay” part depends on the insurance plan deductible. See “out-of-pocket costs more than the mortgage,” above. In the wake of these stories, the company’s stock, as of this writing, had taken a slide.
Given the Alice in Wonderland nature of this election season, it’s not that surprising to see distortion of reality and common sense infecting this EpiPen debacle. In this case, we come as close as humans can to a human pot calling a pharma kettle black: Martin Shkreli, poster boy for grasping pharma greed, actually commented to NBC Newsabout Mylan that “These guys are really vultures” and asked, “What drives this company’s moral compass?”
For the uninitiated, Shkreli is the fellow who bested Mylan’s 400% price increase when his company jacked up the price of a malaria-HIV drug 5000%.
Shkreli’s shenanigans earned him the moniker “pharma bro,” but the “bro” in the Mylan case is no bro: She’s ‘pharma sis’ Heather Bresch, now the company’s CEO. The “textbook” marketing plan she hit on expanded the “find” target—one of the three goals of any pharmaceutical company—reaching for parents of children with allergies. The “what-if” fears of parents are a rich vein to tap, one that clearly has proved immensely valuable to Mylan.
The “find” was a huge success. And once those parents were found, hitting the second goal of a pharmaceutical company—“start,” as in “start them on your product”—was almost inevitable. The question now is, in the face of prohibitive pricing, syringe-hacking, and all of this negative publicity—in which even Martin “Pharma Bro” Shkreli sees a spot of moral high ground where he can stand—Can Mylan continue to hit that third aim: Keep?
My book with co-author and Forbes contributor Tara Haelle is “The Informed Parent: A Science-Based Resource for Your Child’s First 4 Years.” It offers the latest scientific research on home birth, breastfeeding, sleep training, vaccines, and other key topics—to help parents and parents-to-be make their own best-informed decisions. I’ve written for the Washington Post, San Francisco Chronicle, Everyday Health, Forbes, Slate, Grist, The Scientist, MIT Tech Review, and American Scientist, among other outlets.
The author is a Forbes contributor. The opinions expressed are those of the writer.