A closer look at EpiPen, alternatives and costs in the health care industry – Commerce Journal

BECKLEY, W.Va. — Over the past several weeks, controversy has surrounded the life-saving drug EpiPen, its manufacturer, Mylan, and the company’s CEO, Heather Bresch.

The current retail price for a two-pack of EpiPens (both the formula for adults and children) is roughly $600. Since 2007, the price for the drug has increased by more than 500 percent, according to the Wall Street Journal. Mylan raised the price most recently in August, but after severe backlash announced it would introduce a slightly cheaper verision of the EpiPen, at about $300 per two-pack, which is still more than the $57 the drug cost in 2007 when Mylan acquired it. 

What is EpiPen and how does it work?

EpiPen contains a drug called epinephrine, which is used to treat anaphylaxis, a potentially life‑threatening allergic reaction, according to the EpiPen website. Symptoms of anaphylaxis vary, but can include hives, itching, skin redness, swelling of the lips and tongue, tightness in the throat and shortness of breath, nausea, vomiting, fast heartbeat, chest pain and low blood pressure.

EpiPen is an auto injector that releases epinephrine to constrict blood vessels to increase blood pressure, relax smooth muscles in the lungs to reduce wheezing and improve breathing, stimulate the heart and work to reduce hives and swelling that may occur around the face and lips.

Most pharmacies will not sell the two-pack of EpiPens separately because approximately 20 percent of patients require a second dose of epinephrine to treat severe allergic reactions.

Are there any alternatives or generic versions of EpiPen?

Jerad Bailey, a pharmacist with Cabin Creek Health Systems in Dawes, West Virginia since October 2011, said there is an alternative with no name brand — simply an “epinephrine auto-injector.”

Pharmacies in southern West Virginia report this version of the medication is approximately $400, roughly $200 less than the name brand.

“Brand medications are generally expensive because a company that wants to bring a medication to market has to do clinical trials and invest a lot of money to prove the medication is effective and safe,” Bailey explained.

He said the FDA gives the company exclusivity on the market for a set number of years to recover some of the costs; afterward, other companies can introduce generic versions.

When generics are introduced, the company must prove the medication is similar to the name brand. But because the generic manufacturer does not have to conduct clinical trials, their cost is significantly less. As more generics come to market, the competition drives down costs even further.

EpiPen currently does not have an FDA-equivalent generic, as the generic auto-injector has a slightly different injection device. But Bailey noted the medicine, the dosage and the shelf-life are basically identical to EpiPen.

“As a pharmacist, I can’t legally substitute it, which creates a barrier,” Bailey said. “The pharmacy has to get a verbal order.”

He encourages patients trying to save money to ask their doctors to write their prescription for the alternative version.

“It’s frustrating,” Bailey said of the cost. “This is a barrier for care. It potentially means patients go without food or other medications or put other things aside.”

He said most pharmacies do not dispense vials of epinephrine and syringes, although this method is much less expensive, because of the immediacy and the intensity of allergic reactions.

The process needs to be as simple as possible for both the patient and anyone else who may be administering the medication, especially parents, who may panic when their child displays symptoms of anaphylaxis.

Although not a common occurrence, Gilbert Pharmacy owner George Smith said one mother came to his pharmacy last year who was unable to afford EpiPen for her child.

“I arranged a plan for her to pay X amount of dollars each month,” Smith said. “I’ve not seen anyone turned away.”

He said independent pharmacies have the ability to set up payment plans, but chain pharmacies may not offer the same flexibilities due to corporate restrictions.

Bailey also encourages patients to look at their options, such as clinics and pharmacies that participate in the 340B Drug Pricing Program, which requires drug manufacturers to provide outpatient drugs to eligible health care organizations/covered entities at significantly reduced prices.

What caused the rate hike?

Many pharmacists point to pharmacy benefits managers as the reason for price increases.

According to an infographic from Pharmacists United for Truth and Transparency (PUTT), Mylan makes $274 per 2-pack of EpiPens; brokers make $25; pharmacy benefit managers (who negotiate discounts/rebates and contracts with groups and insurers) and health insurers make $284; wholesalers make $20; and pharmacy retailers make $30, bringing the patient retail price to $608.

Business Insider reported as more Americans started taking more prescription drugs in the 1960s, insurance companies were overwhelmed processing claims. Pharmacy benefit managers (PBMs) offered to do it for them, bringing about plastic prescription cards and mail-order drug delivery.

For patients, PBMs are supposed to negotiate to keep drug prices down. For insurers, they are supposed to make processing prescriptions cheaper and easier. For drug companies, they are supposed to favor certain drugs in exchange for rebates and price breaks.

PBMs receive a fee from insurers and employers who use their services, and they also take a cut of every sale. Business Insider reports that alone is not the problem; the problem is the lack of transparency from the PBMs — pharmacies have no idea how much insurers are paying for drugs and insurers aren’t sure how much the pharmacy gets for dispensing the medicine.

Teresa Stickler, president of PUTT, said rebates are also an issue. Rebates are like a coupon, or kickback, that goes back to the PBM if the pharmaceutical company has increased the price of a drug. The insurer, who is paying for the drug, is not informed about the rebate.

“It’s a very complicated system,” said Stickler. “Even pharmacists have trouble keeping everything straight. We think it’s complicated on purpose.”

Fortune reported if Mylan were to reduce the price of EpiPen, some PBMs might not want to provide as much coverage of the drug if it weren’t profitable for them, which could make it harder for patients to get the drug.

The Washington Post reported Mylan CEO Heather Bresch made $19 million in 2015, but PUTT said the public should also be aware of how much CEOs of pharmacy benefit managers, like Express Scripts, are earning.

George Paz, CEO of Express Scripts, is earning roughly $12.9 million per year, according to PUTT. Mark Thierer, Caramaran Corp CEO, is making $14.8 million and Larry Merlo, CEO of CVS Caremark, is making $24.2 million.

As far as Stickler is aware, there is no regulating agency for PBMs.

“They need to be regulated,” Stickler said. “They’ve been abusing the system for years.”

A U.S. Senate subcommittee recently announced that it will open an investigation into the EpiPen price increase. state senator? U.S.? Clarify where she’s from Sen. Shelley Moore Capito introduced legislation Tuesday called “Transparency and Accuracy in Medicare Part D Spending Act,” which would prohibit Medicare Part D plan sponsors and PBMs from retroactively reducing payments on accurate reimbursement claims submitted by pharmacies.

What other drugs are seeing rate hikes?

Mylan is certainly not alone in its price increase of EpiPen.

“For every one like EpiPen, there’s 20 just like it,” Colony Drug pharmacist Keith Foster said.

A recent example happened in September 2015, when Turing Pharmaceuticals increased the price of a drug called Daraprim (used to treat infections in people with compromised immune systems, such as AIDS patients) overnight from $13.50 per tablet to $750.

PUTT is also concerned about several other name brand drugs, such as Crestor and Nexium.

“We’re finding there’s a generic out there, but the PBMs aren’t covering generics. They’re only covering brands.”

How many people are actually paying retail price for EpiPen?

As reported by Fortune, only 4 percent of EpiPen patients are actually paying the whole $608 wholesale cost out-of-pocket, according to IMS Health data.

Patients typically only pay retail price if they don’t have health insurance or if they have not yet reached their health plan’s deductible.

The life-saving drug is either completely covered or approximately $3 under Medicaid. 

For patients to compare prescriptions costs from different pharmacies, visit goodrx.com.

Holdren writes for The Register Herald in Beckley, West Virginia.