What’s the recipe for a drug pricing controversy?
The biopharmaceutical industry is under attack for its bafflingly complex pricing, and the target du jour is Mylan: The public and politicians are seething over the fact that the drug maker’s epinephrine injector, the EpiPen, has more than quintupled in cost since 2007. It now retails for more than $600 for a two-pack.
But what’s so special about the EpiPen? And why has the anger suddenly gone viral?
Reports of the device’s price increases have circulated for years. And Mylan (like other drug makers) has been raising plenty of other prices, too: In recent years the list price for its gallstone drug ursodiol is up 542 percent, its irritable bowel syndrome drug dicyclomine is up 400 percent, and its antihypertensive drug verapamil has tripled in price.
We’ve broken down the ingredients for a public uproar — and identified some other drug makers that may well find themselves in the hot seat next. To excite the public’s ire, there has to be:
A mind-boggling price hike
Martin Shkreli’s 5,000 percent price hike for the drug daraprim, often used to treat infections in patients with AIDS, turned him into the poster boy for pharmaceutical greed. Mylan steadily hiked the price of the EpiPen year after year after year — often, twice a year, with no explanation other than that the market would bear it.
Another company with this ingredient: Insulin makers. The cost for insulin has more than tripled since 2002 — despite the fact that improvements in insulin in the past decades have been merely incremental.
A compelling patient story
The very thought of an anaphylactic 7-year-old does tug at the heartstrings — and the prospect of such a child being unable to easily access an epinephrine auto-injector has clearly struck a nerve. Similarly, it wasn’t simply Shkreli’s bombast that incited the public. It was the fact that daraprim was used primarily in HIV patients — already a marginalized population.
“We’re seeing increases all the time in drug prices — so the key here is whether the issue can excite an audience’s passion,” said Peter LaMotte, senior vice president of Chernoff Newman, a firm that works in crisis communications and reputation management. “For some companies, it blows up. For other companies, it goes completely under the radar.”
Another company with this ingredient: Teva Pharmaceuticals has increased the price of multiple sclerosis drug Copaxone 118 percent since 2011, according to Reuters — despite competing with a generic form of this drug that’s been available since last year. Patients with MS must regularly imbibe a costly cocktail of medications to ward away the devastating symptoms of this disease.
The Bernie Sanders factor
We’re in an election cycle, and the presidential candidates — particularly Hillary Clinton and former Democratic contender Bernie Sanders — have often made a punching bag of pharma. Sanders, in particular, has helped push along the drug pricing issue. He weighed in early, and critically, about Valeant Pharmaceuticals’s price hikes. He publicly rejected a campaign donation from Martin Shkreli. And just this week, he tweeted out (in reference to Mylan) that “something is very, very wrong when drug companies value their profits over the lives of customers.”
Another company with this ingredient: Medivation, which was just purchased by Pfizer (PFE). Sanders just called it out for over-pricing its prostate cancer drug Xtandi, calling its $129,000 price tag — which is quadruple the cost of the drug in other countries — “unconscionable.”
A controversial CEO with a hefty paycheck
Shkreli’s general inability to keep quiet (and antics such as smirking his way through a congressional chastising) has made him a bit of an outlier compared to your standard chief executive. It was his personality, as much as the spiked cost of daraprim, that invited the outpouring of disgust.
At Mylan, CEO Heather Bresch is also inviting uncomfortable scrutiny. The simple fact that her father is Senator Joe Manchin (D-W.Va.) makes her an easy target in some quarters. Then there’s the fact that her salary has been rising right along with EpiPen prices, up more than 600 percent since 2007. Last year, her compensation was $19 million.
Another company with this ingredient: Vertex (VRTX) Pharmaceuticals CEO Jeff Leiden took in a salary of $36.6 million in 2015, though he did accept a 23 percent pay cut this year, to $28 million. The company’s not necessarily raising prices, but it is setting them sky-high to begin with, like the cystic fibrosis drug Orkambi, priced at $259,000 for a year’s worth of treatment.
We, the media
The media — and we, at STAT, are complicit — fueled the fire of both Shkreli outrage and what we’ve (somewhat shamelessly) taken to calling EpiPendimonium.
Other companies with this ingredient: Basically every drug company out there is increasing its drug pricing. The cost of generic tetracycline, for instance, climbed from 6 cents in 2013 to $4.60 in 2015. On the other end of the spectrum, earlier this year, Vanda Pharmaceuticals (VNDA) increased the cost of Hetlioz, a drug that treats a sleep disorder in blind people, up to $148,000 per year — a cost that’s 76 percent higher than it was in 2014.
Occasionally, one case study catches fire and fuels a predictable cycle of media coverage, Twitter storms, online petitions, and congressional statements. What will be next? Use the comment field below to nominate your picks.