Outrage over escalating prices for Mylan’s EpiPen forced the company to react Thursday, as lawmakers demanded relief for parents with children susceptible to severe allergic reactions to food or to bee stings who found themselves forced to add the $608 drug device to their lists of back-to-school supplies.
Mylan responded to the growing chorus of demands for change from Democratic presidential candidate Hillary Clinton, lawmakers, and medical and consumer groups by offering new ways that consumers can save on the drug, which had cost about $100 when Mylan acquired the product in 2007.
The company’s initiatives include offering a savings card that will reduce consumer out-of-pocket costs by up to $300.
Whether it will be enough to turn down the heat on the company is unclear.
While the new initiatives to ease access to EpiPens were welcomed by some, others questioned how long the drug maker’s initiatives will last and how effective they will be. “It helps, but it’s not the complete answer,” said Joel Fiedler, past president of the Pennsylvania Allergy and Asthma Association.
Dr. Fiedler said other drug makers have offered similar discounts and they are often temporary measures. And sometimes pharmacies do not accept drug maker coupons, he added.
He said the EpiPen has a short shelf life, which means consumers have to replace unused drugs. In addition to purchasing a kit for school, parents frequently purchase additional EpiPens for daycare or others places their children might have an allergic reaction.
While escalating drug prices have become an everyday headline, Bernstein Research analyst Ronny Gal believes the furor over the EpiPen stems from parents stocking the drug as their children head back to the classroom.
“Mylan needs to provide some pressure relief for the next couple of months to carry through the back-to-school season. Afterwards, the pressure will naturally come down,” Mr. Gal wrote in a note to clients Thursday.
In addition to the savings card, Mylan, which has its operational headquarters in Cecil, said Thursday it is doubling eligibility for its patient assistance program. The company said that will eliminate out-of-pocket costs for the uninsured and under-insured. Mylan said a family of four with an annual income of up to $97,200 will pay nothing out of pocket for the drug kit.
The drug maker also said it is devising a way for patients to order directly from the company, which would also lower their cost for the drug.
Mylan’s statement did not indicate how long the expanded assistance program will be in place and the company did not respond to a request for a clarification about how long the initiatives will last.
Ms. Clinton issued a statement Thursday saying it is not enough for Mylan to offer discounts to selected customers. She called on the company to lower the price of the drug, saying that if it doesn’t, “the excessive price will likely be passed on through higher insurance premiums.”
Ms. Bresch’s father, Sen. Joe Manchin, D-West Virginia, issued a statement Thursday saying, “I am aware of the questions my colleagues and many parents are asking and frankly I share their concerns about the skyrocketing prices of prescription drugs.”
He said he’d heard Mylan’s initial response to questions about its pricing of the EpiPen auto-injector “and I am sure Mylan will have a more comprehensive and formal response to those questions.
“I look forward to reviewing their response in detail and working with my colleagues and all interested parties to lower the price of prescription drugs and to continue to improve our health care system.”
Mr. Gal estimates EpiPen has captured about 94 percent of the market for the drug. Mylan benefited from two developments: the decision by Sanofi US last fall to take its Auvi-Q epinephrine injector off the market because of problems with the accuracy of the dosage; and Teva Pharmaceutical’s failure to win U.S. Food and Drug Administration approval for a generic version.
“With competitors out of the market, Mylan was in a position to price up EpiPen, which they did,” Mr. Gal wrote in his note.
He estimated Mylan has increased the drug’s price 27 percent since the second quarter of last year. Excluding Mylan’s recent acquisition of Swedish drug maker Meda, EpiPen will account for about 13 percent of Mylan’s revenue this year and about 20 percent of its earnings, Mr. Gal wrote.
Pittsburgh insurer Highmark said its price for EpiPen has increased 30 percent over the last year, partly because Sanofi’s version of the drug was taken off the market.
EpiPen is not the only Mylan drug to come under scrutiny for price hikes. In June, Wells Fargo analyst David Maris said Mylan had raised prices more than 20 percent on 24 products within the last six months and more than 100 percent on seven products. He cited data provided by Medi-Span, a market research firm.
The increases included a 15 percent EpiPen increase in May. Mylan implemented two 15 percent increases for the same product last year, Mr. Maris wrote in a note to clients.
Mylan issued a statement in June to media outlets calling Mr. Maris’ report “flawed,” saying it focused on a small number of the more than 1,400 products the company makes.
“Mylan’s business model is not today, nor has it ever been, premised on price hikes,” the company’s statement said.
Another factor in the outrage over the EpiPen price increase is the fact that the product has not changed much in recent years. “There is nothing new in the formulation of the medication,” Dr. Fiedler said.
Actress Sarah Jessica Parker is among the latest to respond to the EpiPen price hikes, saying Thursday she will end her relationship with the drug maker. The actress had helped Mylan promote the drug because of her son’s peanut allergy.
“I’m left disappointed, saddened and deeply concerned by Mylan’s actions,” Ms. Parker wrote in an Instagram post.
Mylan has said some of the increase in what consumers are paying for EpiPen is tied to the spread of high-deductible insurance plans, which make consumers pay a greater share of drug costs.
In its statement Thursday, Mylan said it receives only $274 of the EpiPen’s $608 list price. The other $334 goes to pharmacy benefit managers, insurers, wholesalers, and retail pharmacies, the firm said.
An industry group representing pharmacy benefit managers that administer prescription drug programs for more than 210 million Americans said Mylan’s attempt to blame others for EpiPen’s escalating price “doesn’t pass the laugh test with policymakers.”
“Mylan is simply the latest drug maker trying to re-frame a pricing problem into a coverage problem. Blaming payers for these massive price hikes is a red herring,” the Pharmaceutical Care Management Association said in a statement Thursday.
Mylan shares jumped nearly $2 in early trading after Mylan CEO Heather Bresch explained the new discounts in a CNBC interview. They ended the day off 30 cents at $42.85, leaving them down 12 percent this week.
Len Boselovic: lboselovic@post-gazette.com or 412-263-1941. Steve Twedt: stwedt@post-gazette.com or 412-263-1963.
First Published: August 25, 2016, 12:27 p.m.
