Tuesday, August 23, 2016


Mylan Pharmaceuticals has altered its price schedule for epinephrine auto-injector EpiPenⓇ. The wholesale price is now $365.16, up from around $50 this time last year. Naturally, this price change, unconnected as it is to the unit costs of production, has prompted a bit of moral outrage.

Quite true. Anaphylactic shock is as terrifying as it is swift. In cases of severe allergy, the windpipe clamps shut and if you're alone, you have to hope that your vision doesn't fade before you can reach your dose. I have been assured by competent, trustworthy health care professionals that lethal suffocation can be somewhat uncomfortable. One shot of epinephrine can relieve the worst of the symptoms almost immediately, and another administered 30 minutes later can relieve lingering issues. Consult a physician before use, and seek medical attention if an attack occurs.

Point is, for some folks, a single bee sting or a couple of peanuts is all that's required for permanent residence with John Cleese's infamous Norwegian Blue, but for the EpiPenⓇ. And it would indeed be a travesty if families had to pay up to a grand for the mistake of a kid accidentally getting a mouthful of Uncle Mike's pad thai. So is this the case? Is Mylan CEO Heather Bresch actually asking bog-standard customers to pony up a car payment per dose?

The short answer: yes, if.

The long answer: no, but.

The MY EPIPEN SAVINGS CARD™ is available to customers under the following restrictions (from the link; emphasis mine):
This SAVINGS card can be redeemed only by patients or patient guardians who are 18 years of age or older who are a resident of the United States and its territories. Not valid for cash paying patients (except for commercially insured patients without coverage for EpiPen® Auto-Injector) and patients who are covered by any state or federally funded healthcare program, including but not limited to any state pharmaceutical assistance program, Medicare (Part D or otherwise), Medicaid, Medigap, VA or DOD, or TriCare. This SAVINGS card is not health insurance. The SAVINGS card is not transferable and the amount of the benefit cannot exceed the patient’s out-of-pocket expenses. Cannot be combined with any other rebate/coupon, free trial, or similar offer for the specified prescription. Program expires 12/31/2016. Program managed by McKesson Corporation on behalf of Mylan Specialty L.P. Product dispensed pursuant to program rules and federal and state laws. Void where prohibited. The parties reserve the right to amend or end this program at any time without notice.
So if your insurance company covers EpiPen, your insurance company picks up the tab. If you pay by cash, you pick up the tab—unless your shiftless commercial insurer doesn't cover it, in which case Mylan has your back. It's a bit confusing, isn't it? Perhaps the wording is too difficult for journalists and politicians to parse, leading to all the pitchforks and the torches. I understand.

At any rate, it seems to me that what we have here is classic price discrimination. The savings cards means that insured patients who are still unable to pay can get their life-saving emergency epinephrine injections at (roughly) zero price, with institutional payers (insurance companies, states, the federal government, &c) absorbing the residual production costs. Put another way, it's precisely the same approach taken by the PPACA: end customers pay next to nothing, and the costs of care are socialized. Only now it's a hated pharmaceutical firm doing it, so we make all suitable preparations to punish the wicked heretic.

Then again, auto-injectors are not strictly bound by patent law, and epinephrine is a generic drug, so you can always just go shopping for alternatives. There's no law that says you have to buy the name-brand product.


1 comment:

  1. Congratulations for being the only one I've been able to find who understands discriminatory pricing. Could it be any clearer than this from the WSJ;


    Mylan NV on Monday said it would launch a generic alternative to EpiPen at a 50% discount after being criticized for dramatically raising the price of the lifesaving drug.

    The company said it would list the authorized generic—which will be identical to the branded product—for $300 per two-pack carton. Mylan said it expects to launch the generic in “several weeks,” after labeling revisions.

    ….Chief Executive Heather Bresch. …said bypassing the brand system and offering an additional alternative was the best option “because of the complexity and opaqueness of today’s branded supply chain and the increased shifting of costs to patients as a result of high deductible health plans.”

    Oh, Obamacare!


Do you have suggestions on where we could find more examples of this phenomenon?