EpiPen may still be too cheap

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Good stuff, cheap

Pick up a newspaper or surf the web and you’ll find story after story taking Mylan to task for EpiPen pricing practices. The list price of a 2-pack has soared from about $100 to $600 over the past decade. The price is deemed too high and the rate of increase is considered particularly unconscionable.

Let me offer a brief counterargument:

  • EpiPen is worth the price. A $300 pen regularly rescues children from anaphylactic shock that would otherwise be fatal, offering them the chance to live to 100 instead of dying at 10. (About 20% of patients need a second dose, which is why these devices are sold in 2-packs.) Meanwhile drug makers charge hundreds of thousands of dollars per year per hemophiliac, tens of thousands or more to give a cancer patient a shot at a couple or few more months of life, and thousands per year to modestly lower the chance of a heart attack. Within that context, and in absolute terms, EpiPen is indeed a bargain.
  • People are complaining that they pay hundreds of dollars per year –or more if they have multiple packs– for something they hope never to use. But they should acknowledge that they are actually using EpiPen even when they never dispense the drug. EpiPen is what lets them send their children on playdates and be comfortable with them away at school and summer camp, go out to restaurants, and take hikes in the woods.
  • EpiPen is worth a lot more than its current and former competitors. According to the Washington Post, Twinject left the market in 2012 and was considered clumsy and unappealing compared to EpiPen. Auvi-Q was recalled last year because it could administer the wrong dose. Teva’s autoinjector was rejected by FDA this year for “major deficiencies.” How many parents would be willing to trade down to save a few dollars on these? Anybody?
  • The failure of Adrenaclick to catch on despite a lower price, distribution through Walmart and a good review from Consumer Reports demonstrates that Mylan has done a lot with EpiPen over the past decade to earn its price premium and high market share. In particular, EpiPens are now close to ubiquitous in schools thanks to clever marketing, effective lobbying, and public health campaigns. School nurses know how to use them, babysitters know how, and so do siblings. When an emergency strikes and seconds count, the familiar tools are at hand, and people are ready to act. It doesn’t really feel like the moment to learn about Adrenaclick for the first time!
  • In effect, Mylan has created a public health support system around EpiPen. I’ll go ahead and make myself even more unpopular by saying that this system justifies the big price increases. When you buy EpiPen in 2016 you’re not just getting the product like you were in 2007, you’re benefiting from the whole system. Although the product itself hasn’t changed, EpiPen is more valuable now than it used to be, and Mylan has justifiably reaped the rewards.

EpiPen is far from perfect. For example, it needs to be stored within a tight temperature range and protected from light.  The pens have to be replaced annually. Other companies are working on EpiPen alternatives, and I’d like them to have a financial incentive to do so. A cheaper EpiPen could be nice, but I’d rather see something that’s better (easier to use, more effective, more stable), even if the price is higher. The current attacks on EpiPen are unfortunate because they discourage investment in these types of innovation.

Before you dismiss these arguments and call me an industry hack, I’ll point out that I have advocated for drug price regulation since 2006. But EpiPen is not the place for the government to intervene.

Image courtesy of Sira Anamwong at FreeDigitalPhotos.net

By healthcare business consultant David E. Williams, president of Health Business Group.

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