Pharma Focus Asia

Mylan Faces Scrutiny Over EpiPen Price Increases

Thursday, August 25, 2016

Mylan NV became the latest pharmaceutical company to face popular outrage about higher drug costs, as attacks mounted Wednesday on the company’s substantial price increases for the EpiPen emergency allergy treatment.

EpiPen is a lifesaving treatment for millions whose allergies can send them into severe shock, including many schoolchildren who are advised to keep an injector handy at all times. A pack of two lists for $608.61, up 548% since Mylan began selling the drug in late 2007, according to Truven Health Analytics.

Mylan’s 17 price increases during that span, including two since a major competitor was recalled late last year, has emerged as the newest flashpoint in public scrutiny of drug costs. Both Democrats and Republicans have leveled criticisms and some called for investigations.

Among those joining in Wednesday were Democratic presidential candidate Hillary Clinton and the top Republican and top Democrat on the Senate Special Committee on Aging. Separately, the American Medical Association called on Mylan to limit the “exorbitant costs” of the drug.

“With many parents required to buy two or more sets of EpiPens just to keep their children safe, the high cost of these devices may either keep them out of reach of people in need or force some families to choose between EpiPens and other essentials,” the doctor group said.

Mylan pointed to a statement saying it was committed to ensuring patients have affordable access to the drug, and the company has given away more than 700,000 EpiPens to schools while paying all the out-of-pocket costs of 80% of commercially insured patients.

The criticism has taken a toll on Mylan, whose stock fell 5.4% on Wednesday after a 4.8% drop the day before.

Many Wall Street analysts don’t expect the government will take action to force Mylan to roll back EpiPen prices, though the analysts say the attention could deter the company and some of its rivals from increasing drug prices further, thereby limiting one key tool for raising revenue.


Although spending on prescription medicines accounts for less than a fifth of overall health-care costs, higher drug prices have become a lightning rod—especially as many patients choose insurance with higher deductible or coinsurance to limit monthly premiums.

Gilead Sciences Inc. confronted congressional investigations after pricing its hepatitis C therapy Sovaldi at $1,000 a day, while more recent targets have included Valeant Pharmaceuticals International Inc. and Retrophin Inc. for triple-digit price increases on drugs they had just bought.

Jennifer Donnelly said she paid more than $1,500 for three packs of EpiPens under her high-deductible health plan late last year for her 11-year-old daughter with a peanut allergy. Her daughter’s school requires one pack, while Ms. Donnelly said she follows recommendations and puts a second in her daughter’s backpack and keeps another at home.

As a result of recent price increases, “Now it’s going to cost me more than $2,000” to buy the packs when the current supply expires, said Ms. Donnelly, a pharmacist living near Minneapolis, Minn. “It’s insane for a medication you hope you never have to use.”

Mylan and other drug companies point to insurance plans that force consumers to pay an ever-larger share of drug costs out of pocket, and note that few health insurers and drug-benefit managers pay a drug’s list price because of rebates and discounts.

The high out-of-pocket costs are “not an easy challenge to address, but we recognize the need and are committed to working with customers and payers to find solutions to meet the needs of the patients and families we serve,” Mylan said.

Critics contend that the drugmakers’ arguments are hard to counter because companies don’t want to reveal the discounts they negotiate saying that could affect future negotiations with payers. Also, payers say they’ve had to raise out-of-pocket costs because of high drug prices.

During the second quarter, Mylan averaged a 40% discount on the EpiPen, selling one pen for about $173, according to an analysis by SSR Health LLC.

Mylan is an unlikely target of drug-price scrutiny in that it sells mostly lower-priced generic drugs. Yet the company has been increasing prices for many of its products, according to Wells Fargo Securities, which counted price hikes on 39 drugs through June.

Twelve Mylan drugs increased in price by more than 100%, including a 542% change for 300 milligram capsules of a gallstone remedy called ursodiol.

EpiPen is Mylan’s top-selling product, generating more than $1 billion of the company’s $9.5 billion total revenues last year. Last year, more than 3.6 million prescriptions were written, according to IMS Health. Nearly 70% of the prescriptions are for commercially insured patients, Mylan said.

 

Source : wsj.com

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