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Mylan Faces Scrutiny For Increasing EpiPen Costs

| by Sam Gravity
Epipen Auto-InjectorEpipen Auto-Injector

Despite increasing the cost of EpiPens over 400% in the past eight years, industry experts say the pharmaceutical company Mylan pays under $30 per device with little to no changes in its effectiveness.

Since its 2008 purchase the EpiPen, a device which releases epinephrine into the body to treat severe allergic reactions, Mylan has increased the price of the product from $100 to over $600 in 2016. In a recent report to NBC News, Kevin Deane, head of medical for PA consulting, attested that the components to the EpiPen cost only about $20 or less to produce, with few changes made in the past several years to account for the increased cost.

"What they've been doing is they've been making little updates to it, refinements to make it work better," said Deane. "But it essentially is the same core technology that was there for many years."

Mylan’s increased profits since acquiring the EpiPen have attracted a large amount of attention, especially Mylan CEO Heather Bresch’s salary, which has increased over 600% with the growing cost of the EpiPen. In an interview with NBC News, Bresch attributed the price hike to the “four or five hands” that touch the product before it reaches the consumer: the manufacturers, pharmacy benefits managers (PBMs), and wholesalers.

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Over the past several years, Mylan has successfully lobbied for legislation that increased its bottom line. In 2010, the FDA changed its recommendations to suggest two EpiPens be sold in a package instead of one, and that EpiPens be prescribed for at-risk patients, not just those with confirmed allergies.

Additionally, in 2013, the government required EpiPens be stocked in public schools, and provided block grants to states to purchase the devices. Bresch has also indicated Mylan intends to legislate EpiPen access in hotels and restaurants in her interview with Brian Sullivan in August 2016.  A peek at the company’s spending from OpenSecrets.org reveals a fair amount of Mylan’s profits go to Mylan’s lobbying budget, which increased from $270,000 in 2008 to nearly $1.2 million in 2016.

New York State state Attorney General Eric Schneiderman suspects the company violated antitrust laws in their schools program, requiring participating schools not to purchase any products from Mylan competitors for 12 months. U.S. Senators Richard Blumenthal of Connecticut and Amy Klobuchar of Minnesota have backed this claim in an administrative subpoena Sept. 6, calling on the Federal Trade Commission (FTC) to investigate whether Mylan “deliberately engaged in exclusionary practices to hinder its competitors and maintain its monopoly position in the market.”

"Previously, schools who wished to purchase EpiPen Auto-Injectors beyond those they were eligible to receive free under the program could elect to do so at a certain discount level with a limited purchase restriction,” Mylan spokeswoman Nina Devlin wrote in a statement to NBC News, “but such restriction no longer remains.”

Sources: NBC (2), NBC NewsCNBC, OpenSecrets.orgUnited States Senate Press Release (2) / Photo credit: Flickr/Greg Friese

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