EpiPen Manufacturer Leads Quiet Attempt to Protect Its Price

The move would eliminate out-of-pocket costs but drive up insurance premiums or other co-pays

EpiPen Manufacturer Leads Quiet Attempt to Protect Its Price
Image: Pixabay
September 16, 2016

Nearly a month after news broke that pharmaceutical company Mylan has increased the price of the emergency, potentially-lifesaving, allergy device known as the EpiPen by more than 400 percent over the past nine years, the company is now spearheading an effort to legally protect the price while also cutting out-of-pocket costs for patients.

It has been a long month for Mylan. The outrage from consumers over the hikes was so intense that lawmakers joined in, including presidential candidate Hillary Clinton, and demanded explanations, investigations, and hearings.

The calls for action worked:Mylan CEO Heather Bresch will testify about the price hikes in a hearing before the House Oversight and Government Reform Committee on September 21;the company is being sued by a woman in Ohio for alleged price gouging;the Food and Drug Administration (FDA) is in discussions with an Israel-based company about producing a competitor device; and Mylan has been forced to make concessions to patients, including providing a savings card to consumers and developing its own generic version of the branded EpiPen device to be sold at half the price.

However, throughout all the outcry and pressure, Mylan never did the one thing that it was being pressed most to do: actually lower the price of the EpiPen. Now, if a solution put forward by several prominent players works, it will not have to.

The Plan

The idea is this: add the EpiPen to a federal list of preventive medical services. This would eliminate out-of-pocket costs for millions of people and potentially quiet protests over the price.

Supporters of the plan include Dr. Leonard Fromer, a clinical professor of family medicine at UCLA, who just promoted the plan in the prestigious American Journal of Medicine (AJM); several groups; and Tonya Winders, CEO of the patient advocacy nonprofit Allergy and Asthma Network, who discussed the idea with key lawmakers late last month.

"We can save lives by ensuring access to these medications," she said.

One part of the plan that these supporters have not mentioned is how much Mylan may benefit if it goes into effect. It would be able to continue charging high prices—even potentially raising them higher—without complaints from patients.

The New York Times (NYT) has examined the plan, including documents and interviews with more than a dozen people. This review revealed that Mylan is very much aware of how it would benefit by the plan and has, in fact, been working to organize and pay for the attempt.

The article published in AJM states that it was "drafted and revised" by a medical writing consulting firm that Mylan paid. This was done in consultation with Dr. Fromer, who has worked as a paid Mylan consultant over the last year, a fact which he discloses in the article. In addition, Mylan has given money to several other groups working on the plan and even met with them—especially with the Allergy and Asthma Network—to organize its strategy.

The idea behind it is simple—some would claim deceptively so. If the EpiPen is put on the federal preventive list, most Americans would not have a co-pay when they get it, meaning that there would be no direct cost to them for the device regardless of its retail price. The company could keep it at its current price, or even raise the price, with relatively little anger from patients.

In reality, the bill would be paid by the federal government, health insurers, and employers, who could pass on the costs to consumers in other ways, such as higher insurance premiums or higher co-pays for other medications.

"In a way, it is brilliant," said Rachel E. Sachs, a law professor specializing in public health policy at Washington University. "We are all seeing them for what they are — the poster child for high drug prices right now, but they don't want to be. And this tactic is nothing but a self-serving move, not a public-regarding one."

The Difficulties

In a statement, Mylan acknowledge that it has paid for "research, resource development and travel" for the nonprofit coalition formed by Winders together with the company to advocate for adoption of the plan. However, the company also stated that "we were clear in our corporate sponsorship agreements that the coalition would maintain control" and pointed out the steps it has taken to aid consumers in affording the EpiPen.

The United States Preventive Services Task Force, a group of physicians and public health experts appointed by the federal government, will decide whether or not to add the device to the list. It is the job of the task force to review disease screenings, counseling, and other treatments in order to figure out if they are effective enough to be placed on the list. Almost all insurers have to adopt certain recommendations made by the task force to comply with the Affordable Care Act.

It may be difficult to get the device put on the list because it currently contains no prescription medicines for diagnosed illnesses. At least one over-the-counter drug—aspirin—has been recommended by the group. Usually, though patient treatments are listed only if there are "no signs or symptoms of the specific disease or condition," according to the agency. One example would be a cancer screening.

Although the chairman of the task force issued a statement that seemed to nearly rule out the possibility of adding the EpiPen to the list, it is clear from Mylan's lobbying history that the company has been highly successful at influencing government policies at both the federal and state levels. Bresch has called the attempt "our unconventional approach to growing this franchise."

One example of lobbying by the company is its involvement in pushing for a federal law passed in 2013 that encourages schools across the country to keep EpiPens in stock. It also takes credit for laws over at least 10 states requiring EpiPens in hotels, restaurants, and other locations and for other laws related to schools in almost every state. It is now pushing for a pending law requiring the devices on all commercial airline flights.

Mylan and its employees are viewed as major contributors to legislators on both sides of the aisle on Capitol Hill. Bresch is the daughter of West Virginia senator Joe Manchin.

Public awareness campaigns have been instrumental in the growth of the epinephrine auto-injector market. Research firm IMS Health estimates that the device now represents 99 percent of that market's $1 billion in sales over the first six months of 2016. Its dominance is partially due to the 2015 recall of one of its main competitors, Auvi-Q, because of dosage problems.

Unorthodox Collaborations

The effort to get the EpiPen added to the federal list seems to have kicked into high gear late last year right as drug pricing became a focus for politicians and the public. Complaints started getting back to Mylan, including some from patient advocacy groups that it funds with grants worth millions of dollars. Winders stated that the company proposed the plan to add the device to the list at a meeting with her organization in November, and she agreed to assist.

The company gives money to the Allergy and Asthma Network to widen treatments for severe allergies. Although due to a confidentiality agreement Winders would not disclose neither the amount of money Mylan has provided nor the exact terms under which it did so, she did acknowledge that part of the amount is for the plan.

"I am being compensated to ensure access to epinephrine," Winders stated.

NYT made a request to Mylan to release the nonprofits from their confidentiality agreements, a request that was rejected by Mylan executive Nina Devlin. However, she did say that nine nonprofits received $1.8 million in donations this year "in support of anaphylaxis awareness and education initiatives," out of which roughly $227,500 was for the federal listing attempt.

It is very common to see a financial relationship between a pharmaceutical company and a patient advocacy group. Such relationships frequently help the lobbying efforts of the company.

With support from Mylan, the Allergy and Asthma Network hosts annual conferences bringing together allergists, pediatricians, school nurses, and lawmakers. Attendees at these conferences work on plans to help push through legislation meant to widen epinephrine distribution.

Representatives from other allergy organizations—all of which have somewhat similar financial relationships with Mylan—have joined Winders in the plan to put the EpiPen on the federal preventive list. These organizations include the American Latex Allergy Association, the Food Allergy and Anaphylaxis Connection Team, and the Asthma and Allergy Foundation of America.

According to Elanor Garrow-Holding, president of the Food Allergy and Anaphylaxis Connection Team, Mylan was the one who began the effort. She also acknowledged the annual grants the company provides to her organization and later added that Mylan is "not part of this task force moving forward. Only the patient advocacy groups are actively participating."

Both she and Winders believe that the work their organizations do has not been affected by the money provided by Mylan.

"Mylan nor any other industry partner dictates our position," Winders said. "They have no direct influence over our messaging."

However, at least two other organizations declined to help with the attempt, citing that it would look like a conflict of interest.

Dr. Bobby Quentin Lanier, executive medical director of the nonprofit physician group American College of Allergy, Asthma and Immunology, stated that his organization had declined an offer Mylan made to pay for several papers about "the possibility of adding the epinephrine auto-injector to the national preventive drug list."

"As we looked at it, we thought, 'No way that we could do that,'" Dr. Lanier said.

Mylan also offered to pay Dr. James R. Baker, Jr., to lead the attempt, but he declined. Dr. Baker is chief executive and medical director of the Food Allergy and Research group, an organization that has accepted money from Mylan in the past.

"We just didn't feel, given the structuring, that it fully aligned with our role as a patient advocate," Dr. Baker said.

Dr. Baker declined to name the organization that he claimed had offered to pay him, citing a confidentiality agreement. He has decided to accept no donations in the future from drug companies manufacturing products that serve members of his organization.

The Plan Moves Forward

The plan, however, is still moving forward with other nonprofits. According to Winders, the Allergy and Asthma Network intends to make a formal submission to the task force in November. And the patient advocates are independently making plans to meet with the eight largest insurers in the country to request that they add EpiPens to their lists even if the federal government rejects the device from its own.

If the task force approves the addition of the EpiPen, there are a couple of different ways it could list the device. It could either require insurers to cover the device without a co-pay, or it could place them on a lower-priority list still adopted by numerous insurers, which would get rid of the co-pay even without the insurer being required to do so. However, Mylan stated that it wants the EpiPen to go on the A list, the most exclusive list. The Affordable Care Act requires most private health insurance plans to cover the services on the A list, as well as certain other recommended preventive services, without charging the patient.

And Dr. Fromer's article will very likely help Mylan's cause, making exactly the argument that Mylan is pushing: "The recognition and classification of epinephrine as a preventive medicine by both the U.S. Preventive Services Task Force and insurers could increase patient access, improve outcomes and save lives."

An acknowledgements section in the article states that Mylan paid for medical writing consultants who "drafted and revised" the article based on Dr. Fromer's comments. However, both Dr. Fromer and a Mylan spokesman have stated in interviews that it was not ghostwritten and the Dr. Fromer had actually been very involved in writing it. He said that he plans to request that the journal revise that article's language to make it clear that he helped to write it.

"My sole purpose in writing this article was to improve access to a lifesaving medication for millions of patients," he said, adding that, although he has worked as a consultant to Mylan, the company did not pay him to write it.

Senor Richard Blumenthal's office was one of those recently contacted by the nonprofits working together with Mylan. He said that the company's tactics—going to patient advocacy groups and a doctor it has paid as a consultant to help get its drug placed on the preventive list—disappointed him.

"This is the dark side of pharmaceutical practices in enlisting and paying professionals to pitch their profit-making drug," he said.