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How Increased Cost Sharing Triggered the EpiPen Crisis

Mary Caffrey
While Mylan has steadily increased the price of EpiPens since 2007, the uproar from consumers is more recent. This suggests that for several years, payers masked the cost of the product, but that has changed with the popularity of high deductible plans.
Controversy over cost of the EpiPen, the epinephrine injection that treats severe allergic reactions to foods or insect bites, isn’t fueled just by the string of price increases since Mylan bought the product in 2007.

There’s another factor in the equation: increased cost-sharing, and high deductible plans in particular, have exposed more consumers to price hikes that once would have been borne by payers. As parents fill prescriptions for fresh back-to-school supplies, they are being hit with the most recent increases, and they are complaining.

US Senator Charles Grassley, R-Iowa, said in a letter to Mylan CEO Heather Bresch that first responders are now creating homemade kits out of syringes to save money, rather than pay more than $500 for a pair of pens. These same pens sold for less than $100 when Mylan bought the company from Merck.

Grassley is one of many members of Congress, both Republicans and Democrats, examining the pattern of price hikes that have tracked increased compensation for Mylan executives since it acquired EpiPen. Bresch, the daughter of US Senator Joe Manchin, D-West Virginia, has seen her own salary rise from $2 million to more than $18 million since the acquisition, according to NBC News.

Congress helped create the current crisis when it passed a law strongly suggesting that states require schools to have EpiPens on hand, and nearly all do. As a mother wrote in the HuffingtonPost earlier this year, her family was shielded for years from the reality of how much Mylan was making off this mandate. That is, until her husband changed jobs, and her $50 co-pay turned into a $440 outlay.

Mylan issued a statement yesterday touting its efforts to make EpiPens available through savings cards, a patient assistance program, and a program that provides free pens to US schools. “In 2015, nearly 80% of commercially insured patients using the My EpiPen Savings Card received EpiPen Auto-Injector for $0,” the statement read. (The Huffington Post mother says her $0 co-pay was actually $100.)

The statement directly attributed the public relations uproar to “current changes in the healthcare insurance landscape” including “an increasing number of people and families (who have) enrolled in high deductible health plans.”

Also, the statement said, more costs are now shifting to consumers and the company is “working customers and payers to find solutions.”

As seen earlier this month, when CVS Health booted mainstay diabetes and cancer drugs from its formulary, payers and pharmacy benefit managers are no longer willing to absorb price increases from drug manufacturers just because patients have no other option.

In the case of the EpiPen, there is another option—a little-known product called Adrenaclick. Few doctors know about it, and pharmacists cannot substitute it for EpiPen. That's because while the drug is the same, Adrenaclick has a different injector and, thus, there's a different set of instructions for using the product. Still, at $142, there's also substantial savings.

Later Wednesday, Democratic presidential nominee Hillary Clinton joined those speaking out against the price increases. Like others, she said more transparency is needed to explain why a drug that has around for years has suddently become so expensive. "As part of my plan, I've made clear that pharmaceutical manufacturers should be required to explain significant price increases, and prove that any additional costs are linked to additional patient benefits and better value, she said.

 

 
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