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Another look at the surge in EpiPen costs
March 27, 2017 / 5:05 PM / 4 months ago

Another look at the surge in EpiPen costs

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(Reuters Health) - Soaring prices and out-of-pocket costs for EpiPens to treat severe allergic reactions haven’t halted a surge in the number of children and adults filling prescriptions for the devices, a U.S. study suggests.

Patients’ out-of-pocket spending for EpiPens climbed 535 percent from 2007 to 2014, the analysis of prescriptions filled by privately insured people under age 65 found. During that same period, the number of annual EpiPen prescriptions almost tripled.

But the number of prescriptions filled by each patient barely changed. This suggests patients’ costs rose due to price increases, not because people started using more EpiPens, said lead study author Dr. Kao-Ping Chua, a public health researcher at the University of Chicago.

“For EpiPen in particular, failing to fill a prescription due to cost could mean the difference between life or death when serious allergic reactions occur - this is why Mylan’s EpiPen price hikes are so ethically troublesome,” Chua said by email.

Generic drugmaker Mylan obtained the rights to sell EpiPen in 2007. Since then, Mylan has increased the list price from $94 to $609, researchers report in JAMA Internal Medicine.

In part due to patient outcry over rising out-of-pocket spending, Mylan released a $300 generic EpiPen in December, the researchers note.

More recently, health insurance giant Cigna dropped coverage of the branded $600 EpiPens and drugstore chain CVS started selling a generic epinephrine injector from Lineage Therapeutics, Inc. for $110.

EpiPens contain a pre-set dose of epinephrine, a life-saving drug used by people at risk of experiencing anaphylactic shock from an allergy attack. Untreated, this type of shock can be fatal because blood pressure can drop suddenly and airways can narrow, making it difficult to breathe.

People with severe allergies to things like peanuts, shellfish, bees or penicillin might be prescribed EpiPens to keep on hand for emergencies. Patients need refills every year because the medicine expires.

For the study, researchers examined data on people who receive private health insurance through more than 100 employers nationwide. They looked at co-payments, co-insurance, deductibles and total out-of-pocket spending.

From 2007 to 2014, patients’ average annual out-of-pocket spending on EpiPen rose from about $34 to $75.

The proportion of patients with out-of-pocket costs of at least $100 climbed from 4 percent to 18 percent during the study period, while the share of patients with costs of at least $200 increased from 0.1 percent to almost 5 percent.

In October, Mylan agreed to pay the U.S. government $465 million after it was accused of falsely classifying the brand EpiPen as a generic medicine to increase revenue from Medicaid by avoiding paying higher rebates per unit sold. Mylan didn’t admit wrongdoing.

Mylan avoided paying $426 million in rebates on only two formulations of EpiPen from 2012 through 2016, according to a separate study in JAMA Internal Medicine. That suggests the total amount Mylan owed the government may far exceed what the company agreed to pay in the settlement, the authors write.

“High spending on prescription drugs on the part of public payors like Medicaid means that they have less to spend on coverage for other health benefits such as doctor’s visits, hospitalizations and long-term care,” said lead study author Dr. Jing Luo of Harvard Medical School and Brigham and Women’s Hospital in Boston.

“They must either reduce covered healthcare services or reduce the number of eligible members and kick people off Medicaid,” Luo said by email.

A Mylan spokesperson declined to comment on the Medicaid study beyond a statement made at the time of the settlement (here: bit.ly/2dLhDCA).

In January, Mylan said that about 90 percent of consumers who got its brand or generic EpiPen had an out-of-pocket cost of less than $50. During the same timeframe last year, 80 percent of patients paid less than $50 out-of-pocket, the company said.

SOURCE: bit.ly/2nYjF7y and bit.ly/2nYc2xL JAMA Internal Medicine, online March 27, 2017.

This story corrects to $426 million from $226 million in paragraph 15.

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