Why Did Mylan Hike EpiPen Prices 400%? Because They Could
http://www.forbes.com/sites/emilywillingham/2016/08/21/why-did-mylan-hike-epipen-prices-400-because-they-could/#10d7e67c477aAUG 21, 2016
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 U.S. (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 EpiPens for home and at school for their child (Mylan does have a program that offers free EpiPens to U.S. schools). Indeed, guidelines call for prescribing two doses in case the first one fails, which Mylan used as an opportunity to cease selling single pens and begin selling only two-packs. As one parent wrote in response to this article, which has been updated:
You have left out/misreported one important detail, which is that with a life-threatening allergy, you are supposed to have 2 EpiPens at all times. If you administer one and it is more than 15 minutes before you are in emergency care, you have to administer the second one. So the pack of 2 is not meant to have 1 at school and 1 at home; it is because you need both with you at all times. This means that you need a pack of 2 at school and a pack of 2 at home for each person with severe allergies. In our case, with 2 kids, we have to have 8 at all times: 2 for each child at school and 2 for each child at home, and that is if we don’t even use them! If we do have to use one, we have to purchase more.
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