My son's prescription wasn’t at the register when I went to pick it up. They were holding it “in the back,” they told me, not because it was a dangerous substance or a rare one but because of its price. The clerk looked like she was bracing for a blow-up when she held out the bag. “It’s five hundred and twelve dollars—that’s with the $100 coupon. So...do you still want it?”
My three-year-old had just been diagnosed with a nut allergy. The allergist prescribed an EpiPen, a device that delivers a controlled dose of epinephrine, to have on hand in case an unexpected trace of walnut sends my son into anaphylaxis. In an emergency, an EpiPen could mean the difference between life and death—and Mylan, the pharmaceutical company that sells the EpiPen, has worked hard to make sure consumers see it that way.
Epinephrine is an inexpensive drug, and Mylan didn’t develop the “auto-injection” device that delivers it; they acquired that in 2007, at which time a pair of EpiPens cost about $100. Under the guidance of CEO Heather Bresch the company began lobbying and advertising for EpiPen use—what they call “awareness-raising,” and what a more cynical observer might call expanding their market. They successfully advocated regulations protecting and promoting their product: EpiPens are now sold only in pairs (in case the first dose isn’t enough to reverse the life-threatening reaction), and there are incentives to encourage schools to keep a supply on hand. Meanwhile, would-be competitors have had trouble getting FDA approval for their devices. Perhaps there is a credible public-interest case to be made for all these measures. But while Mylan was encouraging concerned citizens to keep a pair of EpiPens in every pocket, they were also hiking the price some 400 percent.
I filled our prescription in late August, at the very moment public outrage over Mylan’s price gouging hit its peak. I had read all about the eye-poppingly high price that 20 percent of patients (the ones whose insurance doesn’t cover the cost) were paying for their back-to-school EpiPens. And like those patients, I paid up—Mylan’s awareness-raising campaign had convinced me I couldn’t afford not to.
When the bad press got to Mylan, they responded not by lowering the EpiPen’s list price but by promising to issue more generous coupons that would cover more of the copay. That news broke the morning after my trip to the pharmacy, which means my child’s medical condition picked a pretty rotten time to manifest itself. But what illness has good timing? That is why people need medical insurance, after all—to protect us from being capsized by unanticipated, unavoidable expenses.
In Bresch’s telling, it’s a failure of the insurance system that patients are now aware of what her company has been up to. “It was never intended that a consumer, that the patients would be paying list price, never,” Bresch said in an interview on CNBC. “The system wasn’t built for that.” The trouble is the system wasn’t built for patients at all. The system that has made Bresch so much money—her compensation was $19 million last year—is one in which drug prices are limited only by what insurance companies will pay. Given its success at gaining a virtual monopoly on the expanding adrenaline auto-injector market, Mylan can command astronomically high prices for a product that costs them little. But insurance companies have to make a profit, too, and so those high drug prices get passed along to consumers, in the form of higher premiums and copays, or else to the government. Bresch even blamed Obamacare for the financial squeeze, citing “rising insurance premiums” that “shift significant costs” to patients, without mentioning her company’s decision to hike the price as a factor in creating those costs.
Bresch also said the good people at Mylan “are committed to do our part to drive change” in the healthcare system. And they are working for changes—to get back to the system that worked so well for them before, the one where patients were shielded from seeing the list price even as the company keeps driving it up. In September the New York Times reported that Mylan is now funding efforts to get the EpiPen classified as a “preventive” medical service, one that must be available to all patients without a copay. Then they could keep charging indefensibly high prices for it, but consumers wouldn’t see the evidence. And if their premiums go up again, they’ll blame Obamacare.
Bresch is right that the system isn’t working in patients’ best interests—in fact, she’s living proof that big changes are still needed. But we certainly shouldn’t count on drug companies to lead the way.