This August, the drug manufacturer Mylan increased the price of the popular epinephrine auto-injector brand “EpiPen,” which is used to end anaphylactic shock in people having allergic reactions, to about $600 for a standard two-pack.
This equates to a roughly 400 percent price markup throughout the last several years. In 2007, when Mylan acquired the patent for the life-saving drug injector, the cost of an EpiPen two-pack was about $57.
Mylan has raised the price of the drug every year since it acquired the patent. Mylan CEO Heather Bresch has also seen her yearly salary increase from about $2.4 million to nearly $19 million in roughly the same time. Mylan is not only putting lives at risk with this EpiPen price spike, it is taking advantage of the broken United States drug market.
“I’m OK with there being higher prices for some time,” said Douglas Webber, an assistant professor of economics. “But that period has long since passed. [Mylan] has more than made up the profits for taking the risk.”
Soon after the price spike was announced, Mylan tried to quell outrage from the EpiPen markup by releasing both a $300 voucher for EpiPen users with high copays and their own cheaper generic version of the drug injector, but EpiPen users like myself may still lose out.
Some consumers have already reported instances of pharmacies and insurance companies denying the discount from the vouchers. And because the term “EpiPen” is so commonly used, doctors could forget to write prescriptions for the generic epinephrine auto-injector, causing consumers to pay the higher price because pharmacists can’t alter prescriptions.
The unfortunate truth is that EpiPen users are at the mercy of whatever decisions Mylan continues to make — and I fully understand this reliance.
Last April, I had an allergic reaction and needed to use my EpiPen for the first time. It turned out the salad I was eating contained pesto, which is made from pine nuts. While the reaction wasn’t severe, my mouth swelled up and I knew what was going to happen next if I didn’t act quickly.
After injecting myself with my EpiPen and taking Benadryl, I was driven to the hospital and had to stay there for the next few hours under surveillance.
This is the scenario for which many with severe allergies have to prepare themselves — at every restaurant and at every meal. Life can suddenly be on pause, and it’s precisely why an EpiPen is necessary for everyone with severe allergies to have at all times.
According to IMS Health, more than 3.6 million prescriptions for EpiPens were filled last year, and unfortunately Mylan has only rewarded consumer loyalty with numerous price spikes and lawsuits that have kept EpiPen competitors out of the market.
In 2009 and 2010, one of the companies Mylan acquired sued two other EpiPen market competitors looking to get FDA approval to manufacture a generic EpiPen.
Webber said that due to the cost and high-risk nature of developing drugs, patents are given in the United States to spur development of life-saving drugs, yet Mylan is working to limit any competition.
Webber criticized Mylan’s release of the generic epinephrine injector, calling it “a textbook case of monopolistic behavior” in an email.
“This is an anticompetitive play by Mylan,” Webber added in the email. “The strategy they are pursuing is: capture so much of the market share with their generic EpiPen that it deters competitors from entering because they would not be able to be profitable.”
“They know that the gravy train is about to stop,” Webber added. “It’s amazing how much even a little bit of competition lowers prices.”
For those whose EpiPens are covered by insurance, the high prices are costing insurance companies more money. Even if consumers are not paying for most of the cost of EpiPens, insurance companies are paying full price. They then pass this cost onto consumers through monthly premiums, a phenomenon called “double marginalization.” Webber said with double marginalization consumers must go through multiple companies looking to make money, leaving consumers unable to directly influence the price through purchase.
“In this market, conditions for consumers are worse than a monopoly,” Webber said. “It’s closer to an oligopoly.”
EpiPen carriers like myself currently have no influence over the price of a drug that we desperately need to control our allergic reactions. Mylan needs to remember the customers they serve are trusting them to provide a lifesaving product. The company’s necessary profits have surely been made by now after years of price hikes. Mylan needs to stop testing its consumer loyalty and start putting people before profits.
Christian Matozzo can be reached at email@example.com.