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EpiPen Saga Shines Light on "Shell Game" of Drug Discounts

Mary Caffrey
Democratic lawmakers who signed a letter to Mylan this week say that the practice of offering coupons masks the high drug prices that are paid by commercial health plans. The practice is not allowed in Medicare or Medicaid.
As Mylan worked to reduce the media glare over years of price hikes for the EpiPen, some of its solutions fell flat as analysts and members of the US Senate suggested that te drug makers solutions were Band-Aids on a growing problem: prices for drugs that have been on the market for years are climbing to soaring heights.

This week, Mylan offered a 2-part remedy for consumers who are forced to pay up to $608 out of pocket for its 2-pen package of epinephrine injections, which are a must for those who suffer from life-threatening allergies:
  • The company said it would increase savings cards from $100 to $300 and expand eligibility for patient assistance programs for those at or below 400% of the federal poverty level.
  • Mylan announced plans to speed the arrival of an "authorized generic" that would sell for $300 a package.

A group of 20 US Senators was having none of it, however. Their letter to Mylan CEO Heather Bresch (daughter of one of their colleagues, US Senator Joe Manchin, D-West Virginia), laid bare how the coupon and discount game helps some consumers in the short run, but works against them—and taxpayers—in the long run.

“Your discount programs … represent a well-defined industry tactic to keep costs high through a complex shell game,” they wrote. Patients who get the coupons may be insulated from the full price, but payers are not. The cost of “coupons” is felt later on in the form of higher premiums, which is a reason why the practice is not allowed in Medicare or Medicaid.

“Mylan’s announcement … does nothing to actually lower the price of EpiPens for the millions of kids and adults who rely on them in life-threatening situations,” John Rother, executive director of the Campaign for Sustainable Rx Pricing, said in a statement. “Instead of lowering the price—which has gone up 500% since 2009—Mylan is using smoke and mirrors to appear empathetic. A real solution would be bringing the price down enough that people could afford EpiPens without a coupon.”

While some observers were confused by Mylan’s decision to bring its own generic to market, others wondered if it was a way to appease consumers while crowding out competitors. One epinephrine system, with a different delivery device, is already on the market, and others are waiting in the wings. News this week that MannKind Corporation, maker of the inhaled insulin Afrezza, was working on its own epinephrine delivery system drew interest.

Mike Castagna, MannKind’s chief commercial officer, told The American Journal of Managed Care that while “it’s a different pathway,” there would be an opportunity to bring the product to market at a less expensive price. He said the development timeline was 24 to 36 months.

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