Mylan Faces Scrutiny Over EpiPen Price Increases
August 24 2016 - 6:20PM
Dow Jones News
Mylan NV became the latest pharmaceutical company to face
popular outrage about higher drug costs, as attacks mounted
Wednesday on the company's substantial price increases for the
EpiPen emergency allergy treatment.
EpiPen is a lifesaving treatment for millions whose allergies
can send them into severe shock, including many schoolchildren who
are advised to keep an injector handy at all times. A pack of two
lists for $608.61, up 548% since Mylan began selling the drug in
late 2007, according to Truven Health Analytics.
Mylan's 17 price increases during that span, including two since
a major competitor was recalled late last year, has emerged as the
newest flashpoint in public scrutiny of drug costs. Both Democrats
and Republicans have leveled criticisms and some called for
investigations.
Among those joining in Wednesday were Democratic presidential
candidate Hillary Clinton and the top Republican and top Democrat
on the Senate Special Committee on Aging. Separately, the American
Medical Association called on Mylan to limit the "exorbitant costs"
of the drug.
"With many parents required to buy two or more sets of EpiPens
just to keep their children safe, the high cost of these devices
may either keep them out of reach of people in need or force some
families to choose between EpiPens and other essentials," the
doctor group said.
Mylan pointed to a statement saying it was committed to ensuring
patients have affordable access to the drug, and the company has
given away more than 700,000 EpiPens to schools while paying all
the out-of-pocket costs of 80% of commercially insured
patients.
The criticism has taken a toll on Mylan, whose stock fell 5.4%
on Wednesday after a 4.8% drop the day before.
Many Wall Street analysts don't expect the government will take
action against Mylan, though the analysts say the attention could
deter the company and some of its rivals from increasing drug
prices further, thereby limiting one key tool for raising
revenue.
Although spending on prescription medicines accounts for less
than a fifth of overall health-care costs, higher drug prices have
become a lightning rod—especially as many patients choose insurance
with higher deductible or coinsurance to limit monthly
premiums.
Gilead Sciences Inc. confronted congressional investigations
after pricing its hepatitis C therapy Sovaldi at $1,000 a day,
while more recent targets have included Valeant Pharmaceuticals
International Inc. and Retrophin Inc. for triple-digit price
increases on drugs they had just bought.
Jennifer Donnelly said she paid more than $1,500 for three packs
of EpiPens under her high-deductible health plan late last year for
her 11-year-old daughter with a peanut allergy. Her daughter's
school requires one pack, while Ms. Donnelly said she follows
recommendations and puts a second in her daughter's backpack and
keeps another at home.
As a result of recent price increases, "Now it's going to cost
me more than $2,000" to buy the packs when the current supply
expires, said Ms. Donnelly, a pharmacist living near Minneapolis,
Minn. "It's insane for a medication you hope you never have to
use."
Mylan and other drug companies point to insurance plans that
force consumers to pay an ever-larger share of drug costs out of
pocket, and note that few health insurers and drug-benefit managers
pay a drug's list price because of rebates and discounts.
The high out-of-pocket costs are "not an easy challenge to
address, but we recognize the need and are committed to working
with customers and payers to find solutions to meet the needs of
the patients and families we serve," Mylan said.
Critics contend that the drugmakers' arguments are hard to
counter because companies don't want to reveal the discounts they
negotiate saying that could affect future negotiations with payers.
Also, payers say they've had to raise out-of-pocket costs because
of high drug prices.
During the second quarter, Mylan averaged a 40% discount on the
EpiPen, selling one pen for about $173, according to an analysis by
SSR Health LLC.
Mylan is an unlikely target of drug-price scrutiny in that it
sells mostly lower-priced generic drugs. Yet the company has been
increasing prices for many of its products, according to Wells
Fargo Securities, which counted price hikes on 39 drugs through
June.
Twelve Mylan drugs increased in price by more than 100%,
including a 542% change for 300 milligram capsules of a gallstone
remedy called ursodiol.
EpiPen is Mylan's top-selling product, generating more than $1
billion of the company's $9.5 billion total revenues last year.
Last year, more than 3.6 million prescriptions were written,
according to IMS Health. Nearly 70% of the prescriptions are for
commercially insured patients, Mylan said.
Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com
(END) Dow Jones Newswires
August 24, 2016 18:05 ET (22:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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