The pharmaceutical giant Mylan has announced it will launch a cheaper generic version of its life-saving allergy shot EpiPen amidst public outcry over its alleged price gouging. The company increased the price of its allergy injector by some 400 percent in less than a decade, sparking a national conversation about the monopoly power of drug companies.
Across the United States, millions of children and adults rely on the pocket-sized EpiPen to counteract fatal allergic reactions from common occurrences such as bee stings and peanut consumption.
On Monday, the manufacturer of the EpiPen, Mylan, announced it will essentially sell the same product under two brands at separate price points, in competition with each other. However, consumer advocates say the cost of the generic drug is still prohibitively expensive and triple the price of what EpiPen cost in 2007 when Mylan acquired the product. In 2007, the wholesale price of the life-saving drug in the U.S. was $57. Less than a decade later, it now costs over $300. Each EpiPen reportedly contains only $1 worth of medicine. Mylan has a near monopoly in the U.S., and the company has seen its profits from the EpiPen alone skyrocket to $1 billion a year.
Meanwhile, Mylan CEO Heather Bresch’s total compensation has spiked from around $2.5 million in 2007 to almost $19 million today. Bresch is the daughter of Democratic Senator Joe Manchin of West Virginia. Last week, Bresch appeared on CNBC and said her company is committed to making the EpiPen accessible to everyone.
Mylan’s decision to exponentially increase the cost of EpiPen has ignited a firestorm on both social media and Capitol Hill. On Monday, the House Committee on Oversight and Government Reform sent a letter to Bresch seeking documents on EpiPen pricing, including those relating to revenue from EpiPen sales since 2007, manufacturing costs and the amount of money the company receives from federal government healthcare programs. Minnesota Democratic Senator Amy Klobuchar and Virginia Democratic Senator Mark Warner have both published statements criticizing the price hike, noting they both have children who suffer from severe allergies and rely on the EpiPen. Meanwhile, Hillary Clinton tweeted, “EpiPens can be the difference between life and death. There’s no justification for these price hikes,” unquote. Today, the consumer advocacy group Public Citizen and its allies will deliver a petition signed by approximately 600,000 people to Mylan’s headquarters in Canonsburg, Pennsylvania, demanding further price cuts.
Ashley Alteman talking:
I have a now-eight-year-old daughter. We found out about her life-threatening egg allergy at about nine months old and were introduced to the EpiPen back in, roughly, 2008. We were shown how it works and, you know, the ease and the simplicity of the EpiPen. And yeah, it’s a life-saving drug. When your child goes into anaphylaxis, you direct it right into the thigh of your child, yeah.
I’ve looked at a lot of things. I went, obviously, to pick up my daughter’s prescription, and her prescription used to cost me about $25—I have commercial insurance—used to cost me about $25 for a prescription. A prescription includes two EpiPens. That prescription now costs me about $300. Mind you, I also pay about $1,000 a month in commercial insurance. And then, all of a sudden, this drug has just absolutely skyrocketed. I went to pick it up, and it completely blindsided me.
And in my open letter, I was very honest. I said, at the time, I didn’t have the amount of money that it costs for my copay to pay for these EpiPens at the time. You know, you’re thinking you’re going to spend $25, maybe $50. A lot of people don’t take into consideration the fact that it’s not just one EpiPen that you need. You need EpiPens for your home. The school requires that you have EpiPens on stock at the school. They only allow brand-new, unopened prescriptions, which means two EpiPens in a box. That’s four EpiPens between my house and my daughter’s school, meaning two copays right there. Grandparents, summer camps—that adds up very quickly. And now with this cost of a $300 copay, who can afford to pay that?
I passed the last prescription, which—this isn’t the first hike since 2007. Last year, I passed; we took our chances, because, at the time, we could not afford to spend the money on refilling the EpiPens for our home and for the school. So, I know that because that is me. You know, from one mother to another, I don’t make $19 million year, as Heather Bresch does. So, you know, I kind of look at it as—you know, I directed a letter at her, like you said, as one mother to another, as, you know, these are our children, and our children’s lives depend on this drug. Without this drug, our children, in a certain instance, running into a life-threatening allergen, can die. And the price increase of 400 percent is a huge problem.
Peter Maybarduk talking:
the drug companies want to point fingers at the insurers, and the insurers want to point fingers at the drug companies. But it’s all convoluted mechanisms to avoid plain talk about price. This is a 100-year-old drug in a 40-year-old injection technology that was invented in connection with Department of Defense projects, meaning that taxpayers already paid for a considerable amount of the research associated with this—with this product. It hit the market. When Mylan acquired the rights, the product cost $100. Now it’s up to $600. The increases in EpiPen prices have more or less tracked the increases in the Mylan CEO’s pay, executive compensation, over that period of time. There haven’t been significant improvements to that product, as was mentioned, in the time, so we’re not paying for—we’re not paying for innovation. We’re paying for price gouging. We’re paying for Mylan’s shameful greed.
And today, Public Citizen will deliver—I think the number is increasing—closer to 1 million signatures, hopefully, if you help us out, to Mylan’s corporate headquarters outside Pittsburgh, demanding that that price be reduced. In other words, we can talk—Mylan wants to talk about coupons and patient assistance programs and this new, absolutely bizarre move of introducing a generic version of its essentially generic own product. And—but what—the one thing it won’t do, the one thing Mylan refuses to do, is have plain talk about price and just reduce the price. That would be the simplest, most effective thing to do to ensure that everyone who needs an EpiPen can get one and that the cost burden that we all share, paying into our healthcare system, is reduced.
yesterday, Mylan announced that it was going to introduce what it called a generic EpiPen. Now, this is a little strange, as the drug isn’t patented, and it’s not patents that are keeping competitors primarily off the market. What they mean is, they’ll have—they’ve built a big brand reputation through very aggressive marketing around EpiPen, and they intend to retain a premium market, wherein they can sell for this $600 for the branded EpiPen. But at the same time, they’re going to introduce an identical product, doing the exact same thing in the exact same way, no differences between the product, except it won’t have the EpiPen brand. And they’re going to sell that for $300. And that’s their solution, so-called, to the criticism, rather than simply reducing the price of the EpiPen in the first place down to a more reasonable level, say $100, which is still a very profitable price. It’s the price that many other wealthy countries pay, and was the price at which the product hit the market a decade ago.
They’re also talking about coupons that people can get. if a patient figures out how to use the coupon, they can reduce their copay at the pharmacy. And Mylan says it’s going to enroll more people in patient assistance programs to reduce the price, in theory, that consumers are paying at the counter. But not everyone will use the programs, and it doesn’t do anything—those methods don’t do anything to reduce the cost that we’re all paying into the system for the $600 EpiPen. If you don’t have insurance or if you have a high copay, you still may wind up paying very high prices for these EpiPens.
– Mylan did find one prominent defender: Martin Shkreli. Last [year], you might remember, the former hedge fund manager sparked national outrage after he hiked the price of a life-saving drug by more than 5,000 percent. Prosecutors also accused Martin Shkreli of orchestrating a Ponzi-like scheme at his former hedge fund and his startup drug company, Turing Pharmaceuticals. Well, Shkreli is back in the news weighing in on the EpiPen controversy.
– Last week, Martin Shkreli tweeted, “With 8% margins, Mylan is close to breaking even. Do we want them to lose $? Sole supplier of a life-saving drug should have a better margin.” Shkreli later tweeted, quote, “Mylan: 9% net margin (life saving drugs) Viacom: 15%, (Reality TV) Altria (Cigarettes): 21%.”
Mylan’s primary contribution to this product is simply aggressive marketing. They’re not the ones who really invented the technology behind this, and any investments made in the chain are long since expired. And this is a price that keeps going up without justification. Mylan is taking advantage of their monopolistic position in the market. And that’s the broader—that’s the systemic problem that we all face. It’s the number one reason that drug prices are so high in the United States, is that we have government-granted monopolies in many areas, de facto monopolies or individuals like Shkreli and companies like Mylan that have figured out how to corner a market, and they charge as much as we and our health system collectively will pay to care for our—care for our loved ones. And that’s the business model, right? It’s profit maximizing.
today, Public Citizen is going to deliver a petition to Mylan corporate headquarters demanding that Mylan simply cut the price, cut the obfuscation, cut the convoluted talk about all these alternative mechanisms, and simply cut the price of EpiPens so that we can all afford it and our healthcare bills ultimately go down.
___
Peter Maybarduk
director of Public Citizen’s Global Access to Medicines Program.
Ashley Alteman
contributor to The Huffington Post and several parenting blogs, including ScaryMommy.com. She runs a website called SmashleyAshley.com, where she has just posted an open letter to Mylan CEO Heather Bresch.
— source democracynow.org