It’s the symptom of a broken mess of a health-care system that no one can defend.
How in the world can a cheap old drug like epinephrine (one dollar a dose), combined with a delivery mechanism originally developed for the U.S. military in the 1970s, produce a regulatory monopoly allowing a company to jack up prices six-fold over the past few years? The EpiPen mess is a window into a broken health-care system.
Here are five important things I learned investigating the EpiPen scandal:
1. It’s not at all clear that the Epipen is saving lives.
Almost every story about EpiPen, no matter how critical of Mylan or its chief executive officer, Heather Bresch, mentions that it’s a “lifesaving” drug. But is it really?
Between 1999 and 2009, about the same period when the EpiPen became widely marketed, “overall mortality rates” from allergic reactions (anaphylaxis) “ranged from 0.63 to 0.76 per million population (186–225 deaths per year, MCDD), and appeared stable in the last decade.”
Because allergy rates are rising in children, this overall stability might disguise some extremely mild progress, as Joshua Sharfstein, M.D., of the Johns Hopkins school of public health told me. But it’s remarkably small, at best, given the billion dollars we are spending on EpiPens.
2. A person with food allergies has more chance of being hit by lightning than of dying of his or her allergy.
In 2013, Thisanayagam Umasunthar and colleagues published a systematic review and meta-analysis of fatalities from food allergies — not in the general population, but specifically among people who have food allergies. Death is extremely rare: “In food-allergic people, fatal food anaphylaxis has an incidence rate of 1.81 per million person-years,” or, given a lifespan of 80 years, a 1-in-22,625 chance, compared with the 1-in-13,000 chance of being hit by lightning, according to federal-government estimates.
Umasunthar et al. conclude that “fatal food anaphylaxis for a food-allergic person is rarer than accidental death in the general population.” I think that means that buying every kid in America a bike helmet would probably save more lives than the Epipen, whose unit cost is much lower.
3. The FDA’s refusal to permit competition to the EpiPen is the cause, inexplicable, of Mylan’s price gouging.
It’s not like alternatives don’t exist. Five products competing with the EpiPen are currently used in Europe. They include inexpensive pre-filled syringe pens. Three are cartridge-based: FastJekt, Altellus, and Jext. Anapen and Emerade, two older-model syringe pens, are still used in Europe but have been taken off the market in the U.S.
Washington’s King County recently created its own cheap epinephrine solution for emergency medical technicians, substituting pre-filled syringes for the costly EpiPens. This saved at least $150,000 a year. A side advantage: More patients received epinephrine, since restrictive protocols for when to use the costly drug did not apply to the pre-filled syringes.
Here’s another thing: Regulators focused myopically on marginal benefits of one delivery system over another. Epinephrine decays with time and especially with heat. Pre-filled syringes may not be as easy for untrained folks to use as auto-injectors, but they have the potential advantage of being cheap and easy to replace, making it far more likely that potent drugs were available if someone needed them, and at far less cost.
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4. Cheaper “generics” marketed by the same company are just another name for insurance fraud.
Mylan is trying to get escape the risk of this public-relations disaster by creating and marketing its own “authorized generic” version — that is, it is marketing the same product under a different name at half the price (still three times higher than the price of the EpiPen a few years ago). CEO Heather Bresch explained, according to PharmExec.com, that “the company would keep its costly brand on the market at a list of $600 for a two-injector packet, which maintains that price as the basis for Medicare reimbursement and ‘best price’ calculations.” That Mylan is selling to uninsured customers at half the price it is charging the government and insured customers indicates that the price it is charging insurers is nothing like the “market price” for the product. Under any sane definition of “insurance fraud,” that’s what this would be: charging insured customers higher price than the market price.
5. And “authorized generics” made by the same company may be anti-trust violations, too.
Gaming the regulatory system by producing their own “generics” is actually a strategy that drug and medical-device companies use to prevent competition, as PharmExec.com explains:
Brands often roll out authorized generics (AGs) to retain some control of a market while generic competitors move through the FDA regulatory process. Mylan can bring out its generic version quickly, as it doesn’t need regulatory approval. . . . Such actions have caught the attention of the Federal Trade Commission (FTC), which issued a report in 2011 on the role of AGs in shaping, and limiting, generic competition.
Conservatives should not try to defend the indefensible. Our health-care system is broken by politics: the regulatory kind that drug companies use to game the generic-drug system, and the legislative kind that companies use to buy special favors for particular products such as the EpiPen. Our health-care system is broken by advocacy that terrifies mothers into believing they need an expensive drug-delivery device to save their child’s life. It is broken by a litigation system that drives doctors to overprescribe for fear of being sued before a sympathetic jury whose views are shaped by anecdotal evidence. It is broken by Obamacare, which has licensed drug companies to jack up their prices.
#related#Drug-company executives get rich gaming the regulatory system and rip off terrified moms, and all of us who depend on health insurance, while the FDA refuses to permit alternative systems widely used in European countries, and media push the creation of politically and legislatively favored treatments.
That’s a broken mess of a health-care system that no one can defend. Certainly not Heather Bresch, who increased her own compensation each of the past nine years, from $2,453,456 in 2007 to $18,931,068 in 2015 — getting rich by adroitly manipulating our broken health-care system to her own and her company’s immense benefit.