EpiPen may still be too cheap

IT14-myl-082516-iStock

Good stuff, cheap

Pick up a newspaper or surf the web and you’ll find story after story taking Mylan to task for EpiPen pricing practices. The list price of a 2-pack has soared from about $100 to $600 over the past decade. The price is deemed too high and the rate of increase is considered particularly unconscionable.

Let me offer a brief counterargument:

  • EpiPen is worth the price. A $300 pen regularly rescues children from anaphylactic shock that would otherwise be fatal, offering them the chance to live to 100 instead of dying at 10. (About 20% of patients need a second dose, which is why these devices are sold in 2-packs.) Meanwhile drug makers charge hundreds of thousands of dollars per year per hemophiliac, tens of thousands or more to give a cancer patient a shot at a couple or few more months of life, and thousands per year to modestly lower the chance of a heart attack. Within that context, and in absolute terms, EpiPen is indeed a bargain.
  • People are complaining that they pay hundreds of dollars per year –or more if they have multiple packs– for something they hope never to use. But they should acknowledge that they are actually using EpiPen even when they never dispense the drug. EpiPen is what lets them send their children on playdates and be comfortable with them away at school and summer camp, go out to restaurants, and take hikes in the woods.
  • EpiPen is worth a lot more than its current and former competitors. According to the Washington Post, Twinject left the market in 2012 and was considered clumsy and unappealing compared to EpiPen. Auvi-Q was recalled last year because it could administer the wrong dose. Teva’s autoinjector was rejected by FDA this year for “major deficiencies.” How many parents would be willing to trade down to save a few dollars on these? Anybody?
  • The failure of Adrenaclick to catch on despite a lower price, distribution through Walmart and a good review from Consumer Reports demonstrates that Mylan has done a lot with EpiPen over the past decade to earn its price premium and high market share. In particular, EpiPens are now close to ubiquitous in schools thanks to clever marketing, effective lobbying, and public health campaigns. School nurses know how to use them, babysitters know how, and so do siblings. When an emergency strikes and seconds count, the familiar tools are at hand, and people are ready to act. It doesn’t really feel like the moment to learn about Adrenaclick for the first time!
  • In effect, Mylan has created a public health support system around EpiPen. I’ll go ahead and make myself even more unpopular by saying that this system justifies the big price increases. When you buy EpiPen in 2016 you’re not just getting the product like you were in 2007, you’re benefiting from the whole system. Although the product itself hasn’t changed, EpiPen is more valuable now than it used to be, and Mylan has justifiably reaped the rewards.

EpiPen is far from perfect. For example, it needs to be stored within a tight temperature range and protected from light.  The pens have to be replaced annually. Other companies are working on EpiPen alternatives, and I’d like them to have a financial incentive to do so. A cheaper EpiPen could be nice, but I’d rather see something that’s better (easier to use, more effective, more stable), even if the price is higher. The current attacks on EpiPen are unfortunate because they discourage investment in these types of innovation.

Before you dismiss these arguments and call me an industry hack, I’ll point out that I have advocated for drug price regulation since 2006. But EpiPen is not the place for the government to intervene.

Image courtesy of Sira Anamwong at FreeDigitalPhotos.net

By healthcare business consultant David E. Williams, president of Health Business Group.

11 thoughts on “EpiPen may still be too cheap

  1. William Halper

    Your argument could be used as rationalization for increases up to an economic balancing point where the price is only slighter less than the net present value of the societal worth of the individual saved. It is, putting it politely, cold and callous.

    The company is absolutely entitled to make a fair and reasonable profit. But the moment some child suffocates because their parents couldn’t afford an EpiPen..simply because of price increases…they need to recognize their culpability. This isn’t a case of an exotic cancer drug. This is a old, well established med.

    Reply
  2. Amy N.

    “EpiPen is what lets them send their children on playdates and be comfortable with them away at school and summer camp, go out to restaurants, and take hikes in the woods.”

    If you think that all parents who have a child with severe food allergies are “comfortable” sending their children anywhere just because they have an EpiPen on them, then you clearly don’t have a child with severe food allergies yourself.

    Reply
    1. dewe67 Post author

      Thanks, Amy. I’m sure my choice of words could have been better.

      As an aside, if all anyone wants is a cheaper EpiPen then by all means apply pressure on Mylan. If we’d like something better –that could make parents “comfortable” for example– then we need a profit motive.

      Reply
  3. Chloe

    Yes. You are a hack. You can’t compare what amounts to about $4.00 worth of a drug, which by the way was brought to market thanks in part to tax payer dollars to treatments for hemophiliacs, or sophisticated cancer treatments. There is no price or investment com-parision. None. This is pure greed and you kow it. “mom’s can send their kids on playdates?” What? How is this relevant to the price of the drug? According to this logic, old folks who are oxygen dependant should also be paying at the rate od chemotherapy. After all, it allows them to go on playdates, right. And it is just plain sickening for you to say that Mylan deserves its huge increases just because other manufacturers withdrew from thw market. Mylan is the posterchild for making pharma negotiate reimbursement with CMS, just like every other sector of healthcare.

    Reply
    1. dewe67 Post author

      Chloe,

      Glad I teed up an insult for you so you wouldn’t have to come up with your own.

      Epinephrine is easily available, so if all EpiPen means to you is $4 worth of drug by all means go ahead and fill your own syringe.

      Reply
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