EpiPens: the drug pricing doesn't work

EDITOR'S BLOG: Big Pharma is a complicated business but price gougers have no defence.

by Matthew Gwyther
Last Updated: 01 Sep 2016

On New Year’s Day 2010 when my daughter Marnie was about eight months old my wife and I decided to give her a little food treat. Rather than the usual pap or Ella’s Kitchen pouch she had a small helping of juvenile shaped pasta with some fresh pesto sauce. It didn’t go down well.

Inside two minutes we saw we’d made a big mistake. She had a massive reaction to the food. Not just going ‘yuk’ but the full works - hives, projectile vomiting and most bizarrely her head swelled up which left our beautiful toddler looking not unlike politician Charles Clarke with her ears sticking out from her head at right angles.The GP refused to come out and see her - we were that daft we didn’t take her straight to A&E. She was, it turned out, highly allergic to pine nuts - which are a seed, actually - plus all manner of other stuff including, bizarrely kiwi fruit. We had joined the ever-expanding juvenile allergy club.

So, now she must carry antihistamine syrup, plus an EpiPen for real emergencies. She has used the former on several occasions, the later thankfully never. So she’s probably had ten or so which have to be thrown away after a year because the adrenaline within them doesn’t remain stable and effective.

From relative obscurity the EpiPen has in the last few days come centre stage. The product’s owner Mylan has come under heavy fire for increasing the price of a pair of pens from less than $100 in 2007 when it bought the rights to the lifesaving device to more than $500 today. It is no co-incidence that the purchase of EpiPen by Mylan followed the beginning of a massive, and largely baffling, increase in the diagnosis of childhood allergies, from which Mylan has eagerly made hay. The nurse in the medical room at Marnie’s school has loads of EpiPens, alongside the aspirin in her cupboard.

The whole thing has been a reputational disaster for Mylan. Hillary Clinton has called the company ‘outrageous.’ Patients have taken to the streets. ‘Human Need Over Pharma Greed’ read the banner as protestors in New York gathered outside the office of hedge fund boss John Paulson shouting ‘Hey Paulson, step off it. Put children over profit.’ The canny Paulson went big on Mylan and has seen the share price rocket . And surprise, surprise the Mylan CEO Heather Bresch was revealed to have given herself a 671% wage increase to an extraordinary $18,931,068. So you even have a nasty fat cat element while risking kid’s lives.

Although this looks like a pretty straightforward case of price gouging, as ever in the world of pharma things are complicated. A bit of competition would help bring the price down but the FDA in the United States does not make getting new products to market very easy. The EpiPen is relatively simple and need not be the only device to administer adrenaline to those suffering anaphylaxis. The cost of making them is pretty small. The French company Sanofi has a rival product as does the Israeli outfit Teva but both have faced considerable hurdles.

The American system is an insane one. Hillary Clinton, if she is successful in her presidential bid, might want to do something to introduce cost controls to prevent this kind of appalling behaviour.

The mix of money and health is always fraught but the pharmaceutical industry is not helped by stories like this or the even more outrageous tale of Martin Shkreli, the nihilist ‘Pharma bro’ who last year acquired the AIDs drug daraprim and promptly put the price up by 5000% to $750 a pill. Shkreli, like Mylan, has the brass neck and derring do to find drugs and devices in the world of medicine that have been under-exploited sleepers and then go for it on price. Such behaviour does not deserve to benefit from the usual defence of costly drugs - the need to recoup huge historic investments in developing the products - because in both these cases, the treatments were brought to market by other companies.

It is also true that thanks to NICE in the UK EpiPens are far cheaper than in the US. The NHS negotiates hard - as indeed it should - and buys in vast bulk so gets them for £52.90 a pair and the vast majority are discarded un-used. Those that are put into action, though, can save a life. Marnie’s consultant told us that the most dangerous time for kids comes in their teens when they are released from the close eating supervision of their parents and think, as they venture out into the world alone, that ‘a Snickers can’t really hurt me, can it?’

In the meantime the crisis PRs are making out like bandits and we can expect various additional gestures from Mylan - it has said it will introduce a cheaper generic for $300 a pair - as it defends its 94% market share and fills its boots while it can. Which reminds me that my daughter needs two more as her current ones have expired.

If EpiPen income sags, Mylan can always go for a push on its drug rocuronium bromide, part of the lethal injection formula of choice in the state of Alabama.

Image source: Greg Friese/Flickr


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