Move over, Martin Shkreli. Get in line, Valeant Pharmaceuticals. Congress appears to have found another drug maker to scold over high prices.
Responding to the high cost of the EpiPen auto-injector for reversing life-threatening allergic reactions, Senator Chuck Grassley (R-Iowa), who chairs the Senate Judiciary Committee, on Monday wrote Mylan Laboratories asking for pricing data on the device.
At the same time, Senator Amy Klobuchar (D-Minn.) asked the US Federal Trade Commission and the Senate Judiciary Committee to investigate price hikes taken by Mylan. Klobuchar happens to be the ranking member of Senate Judiciary Antitrust Subcommittee. And Senator Richard Blumenthal (D-Conn.) also wrote the company for data about assistance programs to patients and first responders. And he also demanded that Mylan lower its price.
As STAT recently reported, Mylan has raised the list price of EpiPens more than 450 percent since 2004, after adjusting for inflation, according to Elsevier’s Gold Standard Drug Database. A pack of two EpiPens cost about $100 in today’s dollars in 2004, but the list price now tops $600.
Twice last year, Mylan raised the price on EpiPen — its biggest-selling product — by 15 percent and raised it by another 15 percent last May, according to Wells Fargo analyst David Maris. The price hikes were made easier by a lack of competition. Last fall, Sanofi (SNY) recalled its own injector due to dosing problems, and Teva Pharmaceuticals, an erstwhile rival, failed to win regulatory approval for an injector last spring.
“There does not appear to be any justification for the continual price increases of EpiPen,” Klobuchar wrote FTC chairwoman Edith Ramirez in a letter today in which she called the price hikes “outrageous. … Manufacturing costs for the product have been stable and Mylan does not need to recover the product’s research and development costs because the product was on the market years before Mylan acquired it in 2007.
“Not only is this alarming price increase unjustified, it puts life-saving treatment out of reach to the consumers who need it most. EpiPen expires after a year, meaning consumers are required to buy new EpiPens annually. However, due to the increasing cost, some people are being forced to carry expired doses of EpiPen, hoping the product will work even past the expiration date. Others are considering using less expensive, traditional syringes, which require more training and are potentially more dangerous.”
The issue is gaining traction for a couple of reasons.
In general, the overall issue of rising prescription drug costs has been part of the national conversation for more than a year. Much of the attention has focused on Valeant and Turing Pharmaceuticals, which used to be run by Shkreli, after those companies bought older medicines and quickly jacked up the prices by sky-high amounts. But concern over high prices has also extended to newly launched medicines for such hard to treat ailments as hepatitis C and cancer.
Controversy over EpiPen, however, has gained particular traction thanks to price hikes Mylan has taken on several drugs, as well as the new school year getting under way. Some states require schools to stock EpiPens, which are spring-loaded syringes filled with epinephrine. As parents start sending their children off to schoolhouses around the country, they face an increasingly large medical expense for which many are not prepared.
Everyone may feel the brunt, though, according to Grassley. “The cost of an EpiPen prescription has implications for the federal taxpayers, as well,” he wrote to Mylan Chief Executive Heather Bresch. “Over 40 percent of children are insured through Medicaid or the Children’s Health Insurance Program. It follows that many of the children who are prescribed EpiPens are covered by Medicaid, and therefore the taxpayers are picking up the tab for this medication.”
Late last week, Senator Bernie Sanders chimed in, a move that quickly gave the EpiPen controversy increased visibility. He told NBC News that “the only explanation for Mylan raising the price by six times since 2009 is that the company values profits more than the lives of millions of Americans.” And he tweeted that “there’s no reason an EpiPen, which costs Mylan just a few dollars to make, should cost families more than $600.”
In her letter, Klobuchar suggested the FTC look at whether Mylan has used incentives or exclusionary contracts with insurers, distributors, or pharmacies to deny alternative products access to the market. She noted at least one other auto-injector, Adrenaclick, is available. But while it is less expensive, sales are “minimal,” presumably because insurance is spotty, she wrote. “There may be benign reasons for EpiPen’s market success, but the FTC should consider other potential explanations,” she maintained.
In response to Klobuchar, a Mylan spokeswoman wrote us that the drug maker sponsors several programs to increase access, including a patient copay card that the company maintains helped nearly 80 percent of those with commercial insurance receive EpiPen for nothing. Mylan also says it has donated auto-injectors to schools — approximately 700,000 since 2013 to about 65,000 schools.
The relationships with school districts, however, may work to Mylan’s advantage. Two years ago, for instance, the company agreed to provide EpiPens to a Michigan school district, but in return, the schools had to agree not to buy competitive products for the next 12 months, according to The Macomb Daily. This sort of arrangement encourages parents to stick with a product that has proven it can work.
“Ensuring access to epinephrine — the only first-line treatment for anaphylaxis — is a core part of our mission,” she wrote us. At the same time, Mylan also blamed health plans for forcing more patients on to high-deductible coverage that requires more out-of-pocket costs. Again, specific figures were not provided, but the spokeswoman maintained these plans account for the segment of patients for whom the copay card is insufficient.
Blumenthal, however, challenged Mylan to provide information about its co-pay card, which he claimed maxes out at $100 and asked the drug maker for details on how patients can cover the balance of the cost.
Despite Mylan’s moves, Wells Fargo’s Maris believes the escalating publicity is a sour development for investors. “Depending on the election outcome and Senator Sanders potential role on the Senate Committee on Health, Education, Labor, and Pensions, we do not think in the long run Mylan benefits from this type of focus despite the benefit price may be to near-term earnings,” he wrote in an investor note over the weekend. “Price increases can increase scrutiny and reputational risk.”
Mylan shares slid 1.6 percent on the Nasdaq at the close of the market on Monday.