After being blasted for price hikes on its lifesaving EpiPen allergy injections, the drugmaker Mylan announced Thursday that it will expand access to the product — not by lowering the price, but by creating a savings card that will cover up to $300 of its EpiPen 2-Pak.
The list price of the drug is $609 for a two-pack of the injectors, up from less than $100 in 2007, according to data from Truven Health Analytics.
Although the company said that the savings card would halve the cost of the drug to commercially insured patients who pay full price, outside experts said the overall impact will likely be small and that it did not amount to a solution to the broader problem. Such savings cards are a classic public relations move by the pharmaceutical industry, said Harvard Medical School professor Aaron Kesselheim, and it will only be used by a fraction of the people who need the drug. For example, such savings cards are illegal in government health programs such as Medicaid.
"These don’t actually do anything about the price itself, because the high price is still being paid by the insurer, which then ends up being reflected in increasing premiums," Kesselheim said. "This is not a public health solution."
According to Mylan, the savings card will be worth up to $300 and is available on the drug's website. In a fact sheet explaining how it will work, for example, the company shows that a person with up to a $300 co-pay will pay nothing for the drug. Those who pay full price will get $300 off. The company is also increasing the eligible patients for a financial assistance program for uninsured or underinsured patients, allowing families that make up to four times the poverty level to obtain the drug for free.
But the savings card cannot be used by people without insurance or by people who are in government-funded health programs. The cards are not allowed in federal health care programs because they are considered a kickback: Companies use the discounts to incentivize patients to buy a product while leaving the federal government on the hook for the remaining cost of the drug.
The savings card will be offered through the end of the year, at which time it will be re-evaluated as is typical. It will be able to used for up to six two-pack cartons. Although the cards may help some individual patients pay for the drugs, they will require people to be eligible for them and to know about them, obtain them and use them when they fill their prescriptions.
"People just don't want to go through the hassle," said Gerard Anderson, a professor at health policy and management at the Johns Hopkins Bloomberg School of Public Health. "The problem is it doesn't apply to nearly all of us. It only applies to a small subset of people that are willing to take out the coupon and use it. You should just make the drug, in the case the EpiPen, a lot cheaper."
In a research note, Umer Raffat, a senior analyst at Evercore ISI, made a rough estimate of how the savings card program might affect the company's revenue from the sales of the drug: a maximum of $100 million, or less than 10 percent of the company's revenue from the drug. According to IMS Health, sales for the EpiPen 2-Pak were $1.2 billion last year.
Drug companies generally use savings cards because they foster good relationships with patients by defraying the out-of-pocket costs for medication. But the insurance companies still pay their full portion of the cost.
"We have been a long-term, committed partner to the allergy community and are taking immediate action to help ensure that everyone who needs an EpiPen Auto-Injector gets one," Mylan chief executive Heather Bresch said in a statement. "We recognize the significant burden on patients from continued, rising insurance premiums and being forced increasingly to pay the full list price for medicines at the pharmacy counter."
In some ways, what is playing out with EpiPen is simply a repeat of other drug price hikes that have garnered attention and outrage — and eventually quieted down. The move comes after criticism by politicians and the American Medical Association — and a Facebook post by Hillary Clinton calling the price hikes "outrageous."
Before EpiPen, there was Daraprim, the drug where the price was hiked 5,000 percent by Turing Pharmaceuticals' former chief executive, Martin Shkreli, who was dubbed "pharma bro" and widely vilified. Before that there was colchicine, a gout medication that underwent a 5,000 percent price increase.
"It will be something else later, until we really take a good hard look at the market and at the pharmaceutical market and try to fashion systemic responses," Kesselheim said. "We’re just going to be continuing to chase our tails, around these individual instances. ... We can continue to play Whac-A-Mole, or we can try and make real changes to enhance the market's ability to address the issues."
Mylan's move was quickly criticized by politicians.
"Mylan should not offer after-the-fact discounts only for a select few—it should reverse its massive price increases across the board immediately," Rep. Elijah E. Cummings (D--Md.) said in a statement, saying that he had requested a hearing by the House Committee on Oversight and Government Reform on the issue in September.