Crozet Annals of Medicine: Predatory Pricing


As readers of my past columns know, I love the Olympics and this summer’s games were no exception. Right from the start the U.S. began picking up gold medals with the very first going to Virginia Thrasher in the women’s 10-meter air rifle event. I am not sure why air rifle shooting would be segregated by sex, but I do like the event because like most armchair athletes I could easily imagine myself as a world champion at this, having spent much time as a kid shooting BB guns at targets 30 feet away.

Aside from my idle fantasizing, though, the Olympics is a good opportunity for me to get up to speed on some of the neglected medical conditions facing the U.S. public currently. Drug makers spent $56 million to air nearly 500 commercials for various medications during the two-week event.

One commercial in particular that aired 46 times in two weeks was very striking and frightening. A young woman at a party is suddenly stricken with a life-threatening food allergy due to some peanut butter inadvertently baked into her brownies. Her hands and face instantly sprout hideous blotches in shades of red and violet and then she collapses while the partygoers panic. The announcer gravely intones, “Every six minutes, food allergies send someone to the hospital. Always avoid your allergens, and talk to your doctor about a prescription treatment you should carry for reactions.”

This treatment is, of course, epinephrine, delivered by the now infamous EpiPen manufactured by Mylan. Mylan has been in the news recently for its predatory pricing policies on the EpiPen. Mylan has increased the price of its EpiPen, a product that has been on the market for more than three decades, from about $57 a shot when it took over sales of the product in 2007 to more than $600 for two auto-injectors. This contributed to an increase in sales revenue from 200 million dollars a year to $1 billion a year. The actual cost to manufacture the active ingredient, epinephrine, is less than $1.

The CEO of Mylan has blamed the price outrage on Obamacare, explaining that because insurance under the Affordable Care Act has higher deductibles and out-of-pocket costs that the big difference is that patients are simply noticing the cost more now than previously.

While much attention has been directed to the price increases of the EpiPen, very little attention has been paid to the real problem with the marketing of this drug/device, the vast increase in the demand for this device driven by aggressive and misleading information and lobbying from Mylan about the prevalence and lethality of allergies. Due to Mylan’s efforts, the number of patients using EpiPens has grown 67 percent over the past seven years, and now they are also being placed in schools and at Disney venues for use by the general public.

Mylan spent about $4 million in 2012 and 2013 on federal lobbying for legislation, including the 2013 School Access to Emergency Epinephrine Act, according to lobbying disclosure forms filed with the Office of the Clerk for the House of Representatives. This federal legislation provides a financial incentive for states to enact their own laws requiring schools to keep non-student specific epinephrine auto-injectors in case of an emergency. So far, 47 states have passed such legislation.

Mylan also was the top corporate sponsor of a non-profit group called Food Allergy Research & Education (FARE) that was the key lobbyist pushing for the bill encouraging schools to stock epinephrine auto-injectors, of which EpiPen is by far the leading product. And Mylan spent $35.2 million on EpiPen TV ads in 2014.

All of this would make sense if indeed every six minutes (on the FARE website it says every three minutes!) food allergies send someone to the hospital. But they don’t.  Some 20,000 patients visit the hospital every year for allergic reactions and 75 percent of the cases are due to medication or stings, not food allergies. So, at most every 2 hours food allergies send someone to the hospital, or about 14 patients per day in the entire country.  Still, this might be a problem until you realize that 78 percent of those patients are sent home directly from the Emergency Department and the case fatality rate for the most severe form of allergic reaction, anaphylaxis, is one in 2,000,000.

In more good news for worried parents, the case fatality rate of anaphylaxis for children under the age of 17 is one in ten million. This includes not just food allergies but also wasp and bee stings as well as medication reactions.

Just to be clear, food allergies are real and can be life-threatening. Epinepherine is life-saving in those cases. But Mylan is deceitfully fanning parents’ worst fears in order to profit to the tune of one billion dollars. Talk to your allergist about whether you need an EpiPen, or even better, ask about the generic version of an epinephrine auto-injector that has been quietly on the market for years and costs less than $150 for a set of two.

Incidentally, why do EpiPens come in two-packs? Because despite training for one year, 14 percent of parents mistakenly inject the first dose into their own thumb and not their child’s leg. Not exactly a gold medal-winning design.


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