Aug. 25, 2016 — Facing public outrage over the price of its EpiPen auto-injectors, the drug company Mylan announced Thursday it was taking action to make the product more affordable.
Before insurance, a two-pack of EpiPens costs about $600. The company used to offer a $100 discount to help patients afford high copays for the drug. Thursday, it upped that discount to $300, about a 50% discount off the list price. The offer is only good through the end of the year, however.
The company also said it was expanding access to its patient assistance program, which would make the drug available with no out-of-pocket costs to people whose incomes are below 400% of the federal poverty level — $97,200 for a family of four.
Mylan isn’t the first company to use this strategy to make a high-priced drug more affordable to patients. Use of these drug coupons has exploded. In 2011, the website internetdrugcoupons.com listed 340 discounts. Five years later, that number is 2,030.
But health economists say the tactic is misleading. Copay coupons and discount cards lessen the financial pinch at the pharmacy checkout, but consumers don’t often realize that their health insurance is still picking up the majority of the full cost of the drug, which doesn’t change. Insurance companies pass those costs back to consumers less directly, through higher deductibles and copays.
Cheap Drug, Expensive Pen
EpiPens contain a lifesaving dose of the hormone epinephrine. They’re used by people at risk for a life-threatening allergic reaction called anaphylaxis. The medicine costs about $1 a dose. It’s the delivery system that’s considered proprietary. When Mylan acquired the rights to EpiPen in 1997, it cost about $100. The company has steadily increased the price of the pen and promoted awareness of allergies and anaphylaxis using celebrity spokesperson Sarah Jessica Parker.
In an Instagram post on Thursday, Parker distanced herself from the company over its price hikes, saying she was “disappointed, saddened and deeply concerned[GB1] . …”
Mylan did not immediately respond to an email request for comment from WebMD. In an interview on CNBC, company CEO Heather Bresch said, “No one’s more frustrated than me.”
She blamed the health care system for EpiPens’ rising costs. “Our health care is in crisis,” she said.
One parent of a child with life-threatening food allergies says she isn’t impressed by the gesture.
“I thought it was too little, too late. This doesn’t solve the problem. It just puts a small Band-Aid on it,” says Vivian Stock-Hendel, who lives in Los Angeles. She buys four sets of EpiPens at a time for her son, who has severe food allergies.
Experts who study drug prices agree. Aaron S. Kesselheim, MD, JD, is an assistant professor at Harvard University. He’s also part of a team at Brigham and Women’s Hospital that studies how people use and pay for drugs.
In a 2013 article for the New England Journal of Medicine, he showed that drug coupons are mostly used to steer people toward higher-priced brand-name medications when a cheaper alternative is available. Insurance companies still pay most of the wholesale drug cost, and patients may face higher insurance costs as a result.
Mylan’s strategy also leaves a lot of people out, Kesselheim says.
“This is not a comprehensive solution,” he says. “There are many patients and physicians who don’t know about these programs or who don’t qualify for them because of various restrictions or rules.”
Patients on Medicare, for example, can’t use copay cards or coupons.
Mylan says its drug copay programs are necessary because health insurance companies have increasingly expected consumers to bear more of the cost of their health care.
But health insurance plans don’t see it that way.
“We’ve seen this time and time again. Rather than actually taking steps to address the real problem of soaring drug prices, pharma companies try and cover their price hikes through patient assistance programs and copay support. None of which will make a drug more affordable for the people who need it most,” says Clare Krusing, a spokeswoman for America’s Health Insurance Plans, an industry trade group. “Exorbitant price increases on prescription drugs are leading to higher premiums and out-of-pocket costs for patients, and pharma companies continue to deny that reality,” she says.
In addition to EpiPens, other generic medications that have recently gotten steep price hikes include the arthritis medication hydroxychloroquine and the heart drug digoxin.
Stock-Hendel says her family has good insurance. They don’t pay a copay for the EpiPen. But she’s furious with Mylan, too, calling their price hikes “unethical and legal robbery.”
She’s worried that if the price continues to increase, her insurance company may stop paying for it and opt instead to cover a less expensive but slightly different product called Adrenaclick.
In a life-threatening emergency, her teenage son has to be able to give himself a shot. For years, she’s drilled him on using an EpiPen. He has ADHD, and she’s worried that changing products might confuse him if he’s under the stress of an allergic reaction and scared.
To be fair, she says, Mylan should offer refunds to everyone who bought the drug the in the last year, and they should drop the price going forward. Ultimately, she says, she’d like to see them do “something to say that we were wrong and we’re going to make it right.”
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Aaron S. Kesselheim, MD, JD, assistant professor, Harvard University, Boston.
Vivian Stock-Hendel, mother of a son with food allergies, Los Angeles.
Clare Krusing, spokeswoman, America’s Health Insurance Plans.
New England Journal of Medicine, Aug. 28, 2013.