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Sustainable Saturday on the EpiPen Shakedown

15 million people with food allergies need access to an EpiPen.
Too bad its price has increased 500 percent since 2007.

by Susan Hellauer
Scene: a house party. Mood: escalating panic. A young woman has eaten a brownie made with peanut butter, and is breaking out in angry red hives. Her rash and her audibly labored breathing add up to anaphylaxis–a severe allergic reaction to food, insect stings or medication–that can progress rapidly to airway obstruction and death. While a partygoer calls 911, the victim’s friends watch in helpless horror as she slips out of consciousness . . .

It looks and sounds like an educational public service announcement about allergies and anaphylaxis. But it is no such thing.

Stealth sells: the medicine show

Sustainable Saturday is sponsored by Green Meadow Waldorf School, Maria Luisa Boutique and Strawtown Studio.

Broadcast almost 50 times during the Rio Olympics, this “unbranded” pharmaceutical ad from the maker of the EpiPen epinephrine automatic injector implies that the young victim should have protected herself at all costs by carrying a prescription for her known food allergy.
Unbranded ads, in video or print, don’t name the medication they’re selling, and can thus dispense with the litany of nasty side effects. They focus on a disease, often with an undertone of dread, like this “Face Your Risk” spot, shot from the perspective of the struggling victim. Favored by drug companies that have a virtual monopoly on a treatment, unbranded ads urge viewers to talk to their doctors about a “solution,” or, as in this case, go to a website that seems purely educational. But just a click on the “treatment” tab and you’re whisked away to the EpiPen product pages.
Mylan Pharmaceuticals, a publicly-traded company, has an 89 percent share of the growing American market for self-injected epinephrine (a manufactured form of the hormone adrenaline), and is now famously under fire for a 500 percent price rise since 2007 for the EpiPen, which now lists at over $600 per two-pack. Meanwhile, CEO Heather Bresch’s compensation increased 671 percent, from $2,453,456  in 2007 to $18,931,068 in 2015.

EpiPen auto-injector

Mylan’s EpiPen epinephrine auto-injector. 50-year-old technology causes sticker shock in 2016. Photo: Tokyogirl79. Wikimedia Creative Commons.

The steep new cost of EpiPens has been a painful shock, especially for the many families recently forced to adopt high-deductible health insurance policies. No wonder it hurts: they’ve just been run over at the uncontrolled intersection of aggressive capitalism and lifesaving healthcare.
The unbranded ads, the price rises, a tax-dodge “corporate inversion” move to the Netherlands, the intense lobbying to place EpiPens in schools and even at Disney World– they’re all part of a major push to increase Mylan’s share price and, in turn, trigger huge bonuses for CEO Bresch.

Pill flippers and the marketplace madhouse

Bought from a division of Merck in 2007, the 1970s EpiPen was targeted by Mylan’s Heather Bresch (before her elevation to CEO) as an “undervalued” asset from which much greater profits could be wrung. Modestly priced at $57, it was–and still is– absurdly cheap (about $3) to manufacture. It rides around in your kid’s backpack for about 12 months, expires and must be replaced. Every year. Possibly forever.
EpiPen is only one of several medications that Mylan has acquired and rebranded with hefty new price tags, and Mylan’s not the only pharmaceutical company drawing attention for these tactics.

Martin Shkreli

Former Turing Pharmaceutical CEO Martin Shkreli testifying before House Committee on Oversight and Government Reform, February 2016. Photo: Public Domain

In 2015, former Turing Pharmaceuticals CEO Martin Shkreli led the acquisition of 60-year-old antiparasitic Daraprim and raised its price by 5000 percent to over $700 per pill. Shkreli said this and Turing’s other huge price hikes were needed to support the company’s development of new drugs; he would give the drug out to anyone who contacted him who couldn’t afford this medicine.
Canada’s Valeant Pharmaceuticals drew Congress’s irate notice in 2015 when it began raising the price of two recently-acquired old cardiac drugs by over 700 percent and 300 percent respectively.  In the same year, just months before California passed an assisted-suicide bill, Valeant hiked the doctor-preferred final exit medication, the 1930s sedative Seconal (secobarbital) to a whopping $3,000. But there’s a coupon to cover up to $900 of your copay or deductible . . . which should help you rest in peace.

Help for EpiPen consumers . . .

Outfits like Mylan and Valeant will resist reducing the inflated list price for a flipped scrip because it’s a starting point that makes a point: we can haggle, but this med is still going to cost you a whole lot more than its last owner charged.

Heather Bresch Mylan CEO

Mylan CEO Heather Bresch testifying before House Energy & Commerce Committee, 2012. Photo: Public Domain

After two weeks of pure PR disaster, there’s been no hint from Mylan, or CEO Heather Bresch, that EpiPen’s list price will be lowered. But they did roll out initiatives to help consumers cope: a $300 coupon to offset high insurance deductibles and copays, a wider net cast for its lower-income uninsured assistance program, and the announcement this week that they’ll be releasing a new direct-ship-to-consumer generic version of the EpiPen at $300 for two injectors (to which the coupon and other programs won’t apply).
Pharmaceutical companies count on institutional health providers and insurers to deal with their high-end drugs by negotiating volume discounts, by rationing treatment–which usually results in a barrage of lawsuits–and finally by absorbing or passing along the unavoidable damage as best they can.

. . .  or just passing the EpiPen buck?

Mylan’s recent EpiPen consumer initiatives do nothing to help hold down costs for those health providers and insurance companies, including Medicaid and Medicare. For consumers, Mylan’s programs offer only an illusory fix: these crippling overcharges must eventually find their way to insurance and tax bills, or be reflected in decreased coverage and higher deductibles.
In a CNBC interview on August 25, Mylan CEO Bresch insisted that the extreme price hikes are frustrating for her as well, and seemed to blame them on 1) a series of middlemen digging into Mylan’s profit, 2) Mylan’s anaphylaxis education program, 3) getting EpiPens placed in schools (by lobbying for legislation) and restaurants, 4) high-deductible health insurance plans 5) the broken healthcare system, 6) a do-nothing Congress and 7) subsidizing other countries, where the Mylan EpiPen costs about $100-$150. Bresch also implied, perplexingly, that lowering the $600 list price would mean that American consumers would pay more, not less, for EpiPens.

EpiPen’s price war side effects

ephinephrine injection

NY State EMS Check & Inject program kit

Mylan is under scrutiny for using shady tactics in schools and in their dealings with the FDA, in order to prevent or delay a cheaper generic auto-injector from being marketed or gaining a competitive foothold. As long as the coast is clear of rivals, and without protective regulation, there’s nothing to bar continued price gouging.
Teachers and school officials are worried about the effects of the EpiPen price hikes. Nyack Public Schools trains its employees to administer EpiPens, and stocks backup injectors as well. Schools’ Superintendent James Montesano has been following the story with dismay. “The district is concerned about the impact the price increase by Mylan will have on our families. Parents of children with severe allergies don’t have the option of not purchasing the EpiPen, despite the excessive price increase,” said Montesano.
Skyrocketing costs are causing emergency medical agencies across the country, including Nyack Community Ambulance, to train their crews in the use of old-school vial-and-syringe epinephrine injections for anaphylaxis (at $75 per kit), and phase out Mylan’s EpiPens.

This one’s for the kids: fix the drug price mess

Epinephrine vial for injection

Epinephrine ampule for injection. Cost: about $1. Photo: JFoldmei, Wikimedia Creative Commons

The vial and syringe are safe and effective in trained hands, but what about the trembling hands of your 12-year-old at the park with friends, having a severe reaction to a bee sting? Pop the EpiPen cap, slap and hold it against the thigh, even through clothing, and buy precious time until the ambulance arrives.
There are a growing number of at-risk kids—up to 6 percent and counting says the CDC—who need the EpiPen. If their parents and teachers keep screaming, if they keep a bright light on Mylan’s share price priority and CEO compensation, and if they can drown out the jingle of Big Pharma’s legislative lobbying purse, this might finally be the moment that a real solution to the drug pricing mess takes shape.
Learn more:

Bloomberg News on the Marketing Strategy behind Mylan’s EpiPen.

Sustainable Saturdays, a weekly feature that focuses on conservation, sustainability, recycling and healthy living, is sponsored by Green Meadow Waldorf School, Maria Luisa Boutique and Strawtown Studio.

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