A Modest Proposal To Reduce The Price of EpiPens
(A version of this Health Alert was published by Forbes.)
Posturing politicians on Capitol Hill conducted a hearing a few days ago, in which they grilled Heather Bresch, CEO of Mylan. N.V., which makes EpiPens. Prices of EpiPens have skyrocketed in the last few years. According to Aaron E. Carroll, writing in the New York Times, the real (inflation-adjusted) price of EpiPens has risen 4.5 times since 2004.
The politicians were more interested in wagging their fingers and tut-tutting at Ms. Bresch for the amount of money she has made, than actually figuring out a way to lower the price of EpiPens. (By the way, Ms. Bresch testified she has no intention of reducing prices in response to their badgering.)
Devon Herrick of the National Center for Policy Analysis recommends EpiPens be made available over-the counter (OTC). Herrick explains that about one billion dollars’ worth of EpiPens are thrown out unused in the United States, because they need to be immediately at hand but expire after about a year. Pharmacies have evolved into very consumer-friendly retail environments – almost more like supermarkets or department stores than old-chemists’ shops. If patients knew they could walk in and pick up EpiPens from the pharmacy, they would not need to stockpile as many injectors as they do when they have to go to a physician for a prescription.
Does this sound too risky? Not in Canada, where both EpiPen and its competitor, Adrenaclick, are sold OTC. An EpiPen sells for about $80 (U.S.), about one eighth the price in the United States. Before you start rhapsodizing about the benefits of a single-payer, government-monopoly health system like Canada’s, please note even prescription drugs are not covered by most provinces’ health plans and OTC drugs hardly at all. Some Canadians have employer-based coverage that includes EpiPens, but they are not subject to government price controls. The free market is at work.
However, even in Canada the federal government decides whether a drug is available by prescription or OTC. If American politicians ever decide to do something even more fundamental to free up competition, here is a proposal they should be debating: Eliminate the FDA’s power to decide how a drug is distributed.
The Durham-Humphrey Amendment gave the Food and Drug Administration the power to decide whether a drug is available only by prescription or OTC. The law passed in 1951, half a century after the FDA was instituted. Even if you believe Congress should prevent drugs from being available until the FDA has proven their “safety and efficacy,” that does not necessarily imply the FDA should decide whether the drug should be prescribed or dispensed OTC.
The Durham-Humphrey Amendment was passed to increase control over the distribution of amphetamines, but it quickly metastasized to a general federal control over prescribing. Whether it solved the inappropriate consumption of amphetamines is not the topic of this column, but the continuing flurry of legislation attempting to control the opioid epidemic suggests government has not quite figured out how to deal with drug abuse.
Anyway, what would happen if manufacturers had the responsibility to decide how to distribute their drugs, via prescription or OTC? EpiPen has one (much less expensive) competing product, Adrenaclick (manufactured by Amedra Pharmaceuticals). However, EpiPen is better known than Adrenaclick, and is used colloquially (and wrongly) as a generic name (like Coke and Kleenex are similarly abused).
So, it is hard to break through doctors’ prescribing habits to induce them to prescribe the less expensive Adrenackick (especially because U.S. doctors are notoriously ill informed about how much their patients will have to pay for drugs). I suspect if it were free to do so, Amedra might move Adrenaclick OTC to get closer to patients.
Because so many patients are now paying full price for their prescriptions, this move would grab patients’ attention, and Mylan would likely have to respond by moving EpiPen OTC, too. Prices would plummet, because of a decrease in government power. A hearing on the benefits of repealing the Durham-Humphrey Amendment would be a better use of these politicians’ time than more show-trials of pharmaceutical executives who know how to play the system to perfection.
For the record, in response to a question during her congressional hearing, Ms. Bresch claimed that the EpiPen actually lasts for 18 months, not 12 and a newer version is in development that will last at least 24 months and possibly longer.
If EpiPen remains available only via prescription, there is nothing that prevents patients from telling their doctor that they have a high deductible insurance plan or no insurance at all so if there is a cheaper alternative to EpiPen that is equally effective, the doctor should prescribe that instead. Patients need to be more assertive in situations like this if cost is an issue for them. It’s not rocket science.
The syringe is an approved medical device that has a long history. I’ve counted about a dozen auto-injectors on the market. Adrenaline was synthesized more than 100 years ago and epinephrine is generic. But when Adamis Pharmaceuticals wanted to market syringes prefilled with epinephrine, it had to apply for a New Drug Application (NDA), rather than an abbreviated new drug application (ANDA) that is used to apply to produce generic drugs. The FDA turned them down — twice. The agency wanted even more usability studies to determine whether patients or bystanders are capable of self-injecting.
There has been research on outdated EpiPens and they retain up to 90% of their potency several years later.
I heard a lot of angry voices from our legislators. Were those comments an attempt to provide better and less expensive medical care or to get reelected? The latter. Did anyone hear any of them mentioning the alternative to the Epi-Pen, Adrenaclick, sold at Walgreens, Sams, Walmart and elsewhere for $140 -$180.
There are those that say we need more government involvement and become apoplectic at the lack of transparency that exists calling for more rules and regulations. The opposite is what we need. I carry an Epi-Pen and didn’t know of the alternative until recently. Why would I know? Up to now insurance paid most of the bill hiding me from the real costs.
Take note the private sector did release information on this. Consumers Reports had an article in August. Good healthcare policy means that government takes a few large steps back and stands out of the way of real progress.
I just got the answer back on my copay for the Epi-Pen, $27. Why would I try to look any further to match the Candian price (mentioned earlier) of $70? Of course, the fact that I am paying less doesn’t reduce the cost of health care for I am sure the insurer is paying somewhere in the vicinity of $300.
If I were in the free marketplace instead of our pretended free market maybe I would have searched and my search along with millions of others would have led to a total cost of less than $100. That would reduce healthcare costs.
Instead, the collectivists are blinded to the understanding that the total cost is what needs to fall and think that their collectivist attitudes are keeping prices down. In the next breath they complain that premiums have gone up (due to the high price of the Epi-Pen), so they blame the insurer. They like the outcome, redistribution of wealth.
Please give us more details. Have you hit your deductible this year?
No. If I hit my deductible I would be more like the uninsured scampering to find a lower priced choice and even considering the purchase of Adrenaclick.
Some high discount coupons don’t provide the discount to those on Medicare Part D. That is one place where Part D screws the Medicare recipient.
The reason Medicare beneficiaries can’t use the coupons is because CMS considers them a form of kickback. That’s unfortunate.
Which invites the question? Why can’t private insurers enforce the same rule.
So, under your plan, you pay $27 for your first EpiPen of the plan year?
Yes, John, $27 is what I paid. Maybe I can help you out or visa versa. What are you looking for?
The Pharmaceutical Care Management Association has an infographic (http://tinyurl.com/hmtdnjw) rebutting Mylan’s assertions about how much Pharmacy Benefit Managers pocket from rebates.
I have heard three different stories: The insured patient below his deductible does not benefit from rebate and might pay $600 for his EpiPens. Or: The insured patient below his deductible does benefit from a negotiated price. Now, I hear from you that you are below your deductible but still paid just a co-pay.
Color me confused.
John, I may have given you the wrong impression.My deductible was met. I’m on Part D.
However, I am suspicious of the intermediary process and have been trying to figure out how much the bill rises from the day the drug leaves the manufacturer until it arrives at the pharmacy.
There was a brain freeze in the substitution of deductible for doughnut.
Part D? Well, that is a whole different kettle of fish!
Yes, but had I not met my deductible I wonder what I would have been charged.
Do you remember when the pharmacy and insurer were splitting profits? My memory is a bit blurry. If I recall they raised the list price so that the 20% copay exceeded the cost of the drug which was split between the pharmacy and insurer. Can you clear up what I believe to be true?
If I could clear it up, I’d be happy too! The question of how the rebates are divided is the essential question.
I was asking if you remembered what happened a couple of decades ago since my memory of that is a bit blurred.
Today the same problem reappears, but the mechanism likely is quite different.
We purchased private, high deductible, insurance in Texas from Cigna via the Healthcare Marketplace. We also paid around $350 for each pack – one to keep at school, one for my daughter’s backpack and one to keep at home. Would have felt “cheaper” if we would have already met our deductible!
At the end of last school year (June 2015) the school nurse threw our Epi’s in the garbage even though they had not yet expired! More education is needed at school, particularly around the rules that exclude using an Epi on a child if the pen is available but does not belong specifically to the child in need.
Thank you for this. May I ask why you allowed the school nurse to throw them away?
WRT out-of-pocket cost, you paid a lot more than Allan (in a comment above). Actual prices paid by real people appear to have a wide variance.
A study from Minnesota back in the 1990s found the rate of children suffering an anaphylactic reaction in any given was one in 1,400. A similar study from Washington State found only 1 child in 9,524 had an episode in any given year. For that matter, a British study found the rate of children with known allergies dying of anaphylaxis ranged from 1 in 300,000 to 1 in 800,000. Anaphylaxis is fatal far less than 1% of the time.
A study published in the Journal of Allergy and Clinical Immunology counted only 2,458 fatal anaphylaxis deaths in the United States from 1999 to 2010. Most of those are adults — more than 95 percent. The most common known causes were allergic reactions to medications (59 percent) and venom (15 percent). Food allergies accounted for slightly less than 7 percent, although 19 percent of deaths had no known cause. Most deaths were in a hospital or an inpatient setting. The annual death rate for children from food allergies was something like 3 per year during this 12 year period. In other words, your child is more likely to be struck by an asteroid (Ok, I’m being a little facetious).
With the risk of anaphylaxis that small, it makes sense for the school to commit to purchasing, say, 6 EpiPens and assessing fees of $50 apiece to the 40 parents willing to cough up the money. If, on the other hand, you want a dedicated EpiPen, buy it. I would have a talk with a school nurse who threw out an unexpired EpiPen I paid several hundred dollar for. If the school nurse can keep track of EpiPens with enough accuracy to ensure they only use your EpiPen on your child, they can certainly keep track of who to call to come pick up their unexpired pen at the end of the year.
Canada is about as collectivist as you can get in regards to health care…….and yet they have much lower prices for items like Epi-Pen, thanks to a powerful agency called (I think) the Pharmacy Price Review Board.
Price controls certainly do not work for everything, but they seem to working for drugs in many other advanced nations.
Thank you but no. You refer to the Patented Medicines Prices Review Board, which has no say in the price for EpiPen, which is not patented.