The EpiPen, a Case Study in Health System Dysfunction

  • Congress Presses Pharmaceutical Company to Explain Surge in Cost of EpiPen AUG. 23, 2016
  • They need to replace all their EpiPens every year, again and again.
  • The year, Mylan raised the price again.
  • Teva had hoped to offer a generic version of the EpiPen, but concerns from the F.D.A .
  • But by digging a bit further, the story of EpiPens can also explain so much of what’s wrong with our health care system.

It’s a simple, lifesaving medication — yet hurdles to market entry allow a company that makes it to keep raising the price.

@firstecache: #EpiPen’s high costs are due to crony capitalism. The solution: #DarkNet purchases using #Bitcoin @jonmatonis

Three times in the last two weeks, people — a patient, a colleague and my wife — told me stories about how out of control the price of EpiPens were. Monday, my New York Times colleagues recounted in detail how expensive the devices have become in recent years. All tell the tale of how much even basic health care can cost in the United States.

But by digging a bit further, the story of EpiPens can also explain so much of what’s wrong with our health care system.

When people think of allergies to drugs, food or a bee sting, they often think of a rash. And in fact that’s how many allergic reactions develop and proceed. Most can be treated with diphenhydramine (Benadryl) and careful observation. But some are more serious. Between 1 and 2 percent of people can develop what’s known as anaphylaxis, when the airways you need to breathe swell and close.

Luckily, there’s a simple treatment for such reactions. Epinephrine — or adrenaline — is a hormone naturally produced by the adrenal glands. It’s part of your “fight or flight” response, and it causes your heart to beat faster, your blood vessels to constrict, your pupils to dilate and — most important here — your airways to open.

Epinephrine is very, very cheap. Even in the developing world, it costs less than a dollar per milliliter, and there’s less than a third of that in an EpiPen.

But to save a life, epinephrine must be delivered quickly, and in the proper amounts. People suffering severe allergic reactions often can’t do it themselves. Drawing the drug into a syringe and then administering it to someone else requires training and precision that most people lack.

For that, there is the EpiPen.

What makes this auto-injection device so special is not the drug, but the ease with which it automatically administers the correct dose without delay. The instructions are right on the side, and even if you don’t read them, it’s pretty easy to figure out. Pull off the safety cap, put the tip against the thigh, and push. Boom. Epinephrine delivered.

The EpiPen isn’t new; it has been in use since 1977. Research and development costs were recouped long ago. Nine years ago, it was bought by the pharmaceutical company Mylan, which then began to sell the device. When Mylan bought it, EpiPens cost about $57 each.

Few competitors existed, and for various reasons, that has remained the case. The device actually worked and saved lives. People needed it. Mylan raised the price. It also began to raise awareness.

Unfortunately, epinephrine is inherently unstable. Research shows that it degrades pretty quickly over time, and it’s recommended that EpiPens be replaced every year. When my friends ask me if they can take an expired over-the-counter pain medication like acetaminophen or ibuprofen, I shrug and nod. If they don’t get a full dose, it’s usually not a big deal. But epinephrine is no joke. People in anaphylaxis need a full dose every time. They therefore need to replace all their EpiPens every year, again and again.

Kids need them in many places. They need them at home. They need them at school. They need them at camp. They may even want to stash one at Grandma’s house. So people often need to buy quite a few.

More revenue for Mylan. And it raised the price.

Then in 2010, federal guidelines changed to recommend that two EpiPens be sold in a package instead of one. Studies showed that about 10 percent of children who received epinephrine from an EpiPen needed more than one dose. Better to be safe than sorry. Additionally, the Food and Drug Administration changed its recommendations to allow for the prescription of EpiPens for prevention for at-risk patients, not just for those with confirmed allergies. Mylan stopped selling individual EpiPens and began to sell only twin-packs.

It also raised the price.

In 2013, the government went further. It passed a law that gave funding preferences for asthma treatment grants to states that maintained an emergency supply of EpiPens. As the near sole supplier of the devices, Mylan stood to make even more money.

That year, Mylan raised the price again.

Of course, competition would bring the price down. But it’s very hard to bring such a device to market. In 2012, the Adrenaclick and Twinject were discontinued. In 2013, Sanofi began to sell Auvi-Q devices, which even gave audio instructions to walk people though their use. Unfortunately, they were found to give potentially improper doses, and were pulled from the shelves about a year ago.

Teva had hoped to offer a generic version of the EpiPen, but concerns from the F.D.A. sent it back to the drawing board until at least next year.

Adamis hoped to offer prefilled syringes, which would still be harder to use than EpiPens. But it was told by the F.D.A. that much more data would be needed before such a product could be sold.

These setbacks, all in the last year, have once again left Mylan with a veritable run of the market. It raised the price of EpiPens again. As of this May, they cost more than $600 a pack. Since 2004, after adjusting for inflation, the price of EpiPens has risen more than 450 percent.

An alternative still exists. The Adrenaclick, while still not cheap, is back and less expensive than the EpiPen. Some think it’s harder to use, though. It’s not on the accepted list for many health insurance plans. More important, few physicians think of it. Because of that, they write prescriptions for EpiPens. Since the Adrenaclick is not a generic version of the EpiPen, pharmacists can’t substitute one for the other. A prescription for an EpiPen must be filled with an EpiPen, regardless of what consumers might want.

Some people argue that we could still just use syringes and epinephrine for far less money. Sure, they would expire every few months. Sure, they would be harder to use and likelier to break. Sure, they would require training, be hard for the uninitiated to use in an emergency and be more likely to be administered with an incorrect dose. Nonetheless, you could argue that they’re an alternative when the “Cadillac” EpiPens are financially out of reach.

But those are unsatisfactory arguments. Epinephrine isn’t an elective medication. It doesn’t last, so people need to purchase the drug repeatedly. There’s little competition, but there are huge hurdles to enter the market, so a company can raise the price again and again with little pushback. The government encourages the product’s use, but makes no effort to control its cost. Insurance coverage shields some from the expense, allowing higher prices, but leaves those most at-risk most exposed to extreme out-of-pocket outlays. The poor are the most likely to consider going without because they can’t afford it.

EpiPens are a perfect example of a health care nightmare. They’re also just a typical example of the dysfunction of the American health care system.

The EpiPen, a Case Study in Health System Dysfunction