Seven intriguing angles on the EpiPen price-gouging story

The following post is by Alan Cassels, a pharmaceutical policy researcher at the University of Victoria, British Columbia, a journalist, and author of the The Cochrane Collaboration: Medicine’s Best-Kept Secret.

Epipen for allergy.The story in a nutshell: Drugmaker raises prices on an apparent lifesaving drug by over 400%.  Generic alternatives seem unavailable or untrustworthy. Congress is irked.  Parents cry havoc. Greed is denounced.  Company does PR somersaults. 

Clearly a compelling story — one that generated a lot of coverage — and we generally liked a lot of what we saw.  The drug in question is epinephrine, both generically and cheaply available, yet packaged with an auto-injector device for people who are at risk of potentially life-threatening anaphylactic reactions. Since you need the drug at the moment you need it, i.e. when your airways are closing and you are having difficulty breathing, the auto injector is the vital, lifesaving innovation you’re paying for.  

Enter the manufacturer, Mylan Pharmaceuticals, which has cornered nearly 89% of the quick self-dosing epinephrine market with the world’s flagship auto-injector called EpiPen.  Why this story is so much about money is captured by a simple question:  How much would you pay to save that child who is a peanut away from a fatal allergic reaction?  Mylan’s decision to jack up the price to about $600 for a pair of EpiPens (which were previously about $100, and currently cost about $85 in France) has triggered mental anaphylactic shock (according to Bloomberg) especially from parents, even those with insurance, for whom the exorbitant cost creates hardships.

So much has been written about this issue that it would be foolhardy for us to generalize. But here are seven intriguing angles on the story that we believe deserve meritorious mentions.  

1. The PR and Astroturf angle: The Hastings Center, a nonprofit bioethics research institute, ran an excellent piece by Sharon Batt and Adriane Fugh-Berman that helped expose the involvement of patient groups and the issue of corporate-sponsored Astroturf (activism that looks like “grass roots” but is actually a plasticky replica). Similarly, AlterNet did an excellent job digging into the PR lobbying campaign that helps defend high pharmaceutical prices, for which the EpiPen might be the poster-child. Batt and Fugh-Berman, who linked to a New York Times report that also addressed the patient advocacy group angle, said that the EpiPen furor helpfully “exposed the contradictions of patient advocacy groups with funding from the pharmaceutical industry.”  After all, how can patient activists, fed handsomely by particular manufacturers, then turn around and bite those companies’ hands for jacking up prices and harming patients?   The issue here is that Mylan-supported allergy awareness groups such as Food Allergy Research & Education (FARE), the Asthma and Allergy Foundation of America (AAFA) and the Allergy & Asthma Network were completely missing in action on the issue of EpiPen price gouging.  As the authors wryly noted, the educational efforts by these drugs “didn’t include telling patients that a far cheaper epinephrine auto-injector – Adrenaclick – was available – or that a vial of epinephrine and a syringe could be had for about $15.”  At the same time, the scandal has generated its own terminology, with “Epi-rage” used to describe the anger of consumers.

2. The ‘Is anaphylaxis overhyped?’ angle:  It is good to see some stories, such as one in the Wall Street Journal and another in Mother Jones, covering the fact that deaths by anaphylaxis (less than 100 per year in the US) are relatively rare, even though an estimated 200,000 Americans every year end up at the hospital with an anaphylactic reaction. How deadly is the condition? The condition can, of course, be fatal and relatively mild cases can unpredictably become severe. It’s also true that severe allergic reactions, such as dying after kissing someone with peanut butter on their lips, have been misleadingly portrayed by the news media so as to maximize the fear factor. Other reports, like this story in the New York Times, cover research suggesting that one can actually be desensitized to severe allergies. Yet almost none of the EpiPen stories I read even hinted at the prospect of an effective new preventative approach. Suffice to say that the rise in food allergies around the world, and the related growth of the autoinjector marketopen up a huge area of research that asks deep questions about why there are so many people so allergic to so much stuff.

3. The ‘Let’s figure out how this is complicated by health insurance’ angle:  Knowing how the insurance companies are dealing with what are seen to be extortionate prices makes for interesting coverage.  This story in Forbes talks in depth about the insurance issue and how the company has tried to work things to prevent blowback from irate consumers as well as instituting programs for uninsured patients.  Those who are insured but have large deductibles still have to spend considerably to pay for their EpiPens. Even with coupon programs that appear to reduce the price, it becomes an issue of cost-shifting, not cost savings. Admitting that the system didn’t “work well”, the Mylan CEO told Bloomberg: “It was never intended that a consumer, that the patients, would be paying list price, never. The system wasn’t built for that.” Translation: They wanted to soak society in general through the insurance companies but avoid gouging individual patients, which as we’ve seen can generate bad PR. That Mylan might be violating antitrust laws because their schools programs seem designed to maintain their near monopoly just adds to the mounting concerns of its discount programs.  

4. The ‘Let’s do an ad hominem attack on the CEO’ angle:  Many stories covering the issue also find time to attack the CEO of the company making EpiPen. Does it matter that the CEO of Mylan is a Senator’s daughter who wears five inch stilettos, flies around in a corporate jet, lists a Master’s degree on her resume that she never actually got, and makes $19 million per year, mostly from turning EpiPen into her corporate “baby” delivering her company gazillions in profits while she cleverly moves her company’s corporate headquarters to the Netherlands to avoid paying US taxes?  It does if you read the Washington Post, which delivers these salacious gossipy details that don’t change the fundamentals of the story but which certainly add more amperage to the Outrage-O-Meter.  

5. The ‘What about the alternatives?’ angle: Many of the stories mentioned alternatives to the archetypal EpiPen, and the fact that the EpiPen is all about the delivery device and not about the drug within it which CNN notes costs “less than a Big Mac.” The story by Sharon Batt and Adriane Fugh Berman in the Hastings Bioethics Forum, as well as The Philadelphia Inquirer and ABC, noted that the alternative, Adrenaclick, is available in the US and can be a much cheaper alternative, though it might be harder to find, different to use and patients would have to ask their doctors for a specific script for the medication. ABC noticed that two other injectors, AUVI-Q and TwinJect have had to recall their epinephrine injectors due to problems with dosages and the injecting mechanism.  

6. The ‘Let’s blame the FDA’ angle:  While this commentary piece in CNBC did a good job in describing how a competing product was NOT any less safe than EpiPen, but was removed from the shelves because of problems with dosing, it, among other things, placed blame placed on the FDA for forcing high standards on the manufacturers. Claiming that the key issue is the iron grip of Mylan’s patent, it goes on to say that  “the government’s protection of that patent that lies at the root of the price hikes that are leaving a lot of families struggling to meet the costs.” It’s strange to see an outlet that typically cheerleads for Wall Street grousing about the effects of intellectual property protection — one of the key pillars of capitalism — on product pricing. The hypothesis is interesting but very debatable. Canadian coverage of the issue from CTV noted that Canada’s regulatory system was better able to protect consumers from price-gouging pharmaceutical companies.

7. A final angle on expiration dates:  Many of the stories mentioned the issue of expiry dates of the pens but failed to delve into the issue in any great degree. Consumer Reports was an exception, pointing to a 2015 study which found that EpiPens up to two-years past their expiration date could still deliver 90 percent or more of the dose on the label. The story advises that “It’s important to replace your epinephrine injector before the expiration date stamped on the pen,” but quotes an expert who says an outdated device can be used if it’s the only one available in an emergency. I would have liked to hear journalists ask other experts — such as officials at the federal Shelf Life Extension Program — if they concur with Consumer Reports’ advice, or whether expiration date-gaming is yet another aspect of Mylan’s profit-maximizing scheme.

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Comments (4)

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Marc Beishon

September 7, 2016 at 10:44 am

You could also have wondered why there is more choice and much less cost in other countries. In the UK children and some other groups pay nothing for injectors on prescription. There are three currently available:

Emerade Epipen Jext
150µg £26.94 £26.45 £23.99
300µg £26.94 £26.45 £23.99
500µg £28.74

These prices are what the health service pays I think. £1 = $1.33

Also, Embrace and Jext have a longer life than Epipen.

Paul Alper

September 8, 2016 at 11:11 am

Number “4” in the above is even juicier. In the early 2000s, the now CEO was claiming/demanding an MBA, although lacking many of the credits; her father (Senator Joe Manchin) was the West Virginia Governor. Eventually, three top officials, the WVU President , the WVU Provost and the WVU Dean of the Business School were forced to resign over this issue.
Back then, the Chairman of Mylan was a major campaign contributor to the governor and was the university’s largest donor, having given it $20 million in 2003. Adding to the picture, the WVU president was at one time a lobbyist for that company and reported to the now CEO.

Augustus Reco

September 12, 2016 at 7:54 am

Wonderful piece. It is also startling to me that no medium covered the issue that matters most, and that could lead to change with awareness: the conspicuous failure and general non-feasiblity of healthcare goods being treated as commodities in a market. The impossibility of reconciling human rights, American values, and the marketplace is manifest. It is only worsened by the strange veneer and half measures that US faux regulation have created to keep consumers (voters) at bay.

Excellent review and piece, thank you.

Joe Paduda

September 12, 2016 at 11:45 am

I’d suggest that Ms Bresch’s salary is indeed a key factor in the discussion, as it highlights the motivations inherent in driving price. People make these decisions, and if we want to understand what leads to high costs for pharma, medical devices, surgeries, and other forms of medical care, one has to consider the incentives of those who determine price and marketing. To avoid this issue is to completely miss THE key driver – the for-profit (or, in the case of not-for-profits, for-margin) nature of much of the health care industry.