Epi-Pen Prices Soar as FDA Makes Life Tough for Its Competitors

Last October, Sanofi withdrew Epi-Pen’s last true competitor, Auvi-Q,  from the market after some suspected device malfunctions.  Without competition, Mylan, which acquired the Epi-Pen in 2007, when it was selling for around $57, raised their prices to $600 for a 2-pack.  I was actually quoted $800 at my pharmacy.

Teva had submitted an application for a generic version of the Epi-Pen to the FDA.  However, the agency felt “certain major deficiencies” needed to be addressed. Marketing of Epi-Pen’s new competitor will be delayed until at least 2017.

Adamis wants to market a syringe prefilled with epinephrine, the active drug in the Epi-Pen. Some diabetics must inject themselves with insulin, so use of a syringe, rather than an Epi-Pen-like device, is not unprecedented.  The FDA wouldn’t approve it without more studies on patient usability and product stress testing. Mylan is protected from still another competitor by regulatory delays.

Competition keeps corporate greed in check

 

In theory at least, your compounding pharmacist might be able to prepare epinephrine-filled syringes for you.  However, your doctor will have to prescribe them; once the Adamis syringe is approved, compounding pharmacists will be forbidden by FDA regulations from preparing them anymore. The syringe might be a bit more difficult to use, especially for children trying to cope in an emergency, so this option isn’t for everyone.

In the meantime, consumers are usually unaware that there is still another, less expensive alternative.  Adrenaclick is similar to, but not identical with, the Epi-Pen and is available for a fraction of the price. If you decide to try it, be sure and become familiar with it: it has two caps that need to be removed instead of Epi-Pen’s one.

However, the FDA won’t let your pharmacist substitute Adrenaclick unless your doctor re-writes your prescription.  The FDA isn’t sure that you’ll get the exact same blood levels of epinephrine, even though the dose is the same.  Your doctor will have to specify Adrenaclick on your prescription or your pharmacist can’t fill it.

Competition is the greatest price regulator of all.  Without it, Mylan has a virtual monopoly on a life-saving device; about 40% of its profits come from the Epi-Pen. The $1.2 billion in 2015 sales from this product should have encouraged other companies to rush to market with an imitator; epinephrine is cheap and off patent, even though the Epi-Pen itself is patent-protected.

However, the average generic drug takes about 3 years or so to wend its way through the FDA approval process.  Devices generally take even longer.  In the meantime, Mylan can pretty much charge what they want.

Critics of the pharmaceutical companies will use the Epi-Pen price hike as another example of corporate greed—and so it is. However, the real culprit here is the FDA, which has delayed or killed Mylan’s competition. The recent price hike only happened after Auvi-Q was withdrawn and Sanofi decided not to dump it.  Competition keeps corporate greed in check better than any form of legislative price control, which has deadly side effects of its own.

The big casualty of price-fixing by government is less innovation.   Countries that try to keep drug prices down through regulation end up delaying or denying their citizenry access to new, life-saving drugs.  People in other countries might not pay as much money for the drugs they get, but their loss of access can cost them their very lives.

Surprisingly, the marketplace punished Mylan for its price gouging on the life-saving Epi-Pen, even though that strategy would have increased profits to investors.  Their stock price fell about 9% last week for a loss of $3 billion. Mylan tried to stop the stock from dropping further by giving $300 coupons to out-of-pocket buyers, but the stock has not recovered. Even though corporate greed is a real phenomenon, social conscience is too.

Sadly, we can expect to see the cost of other generic drugs and devices soar in the future. In 2000, the FDA intensified its Good Manufacturing Practices (GMP) demands. Companies had to upgrade their equipment, even if was working perfectly, and were fined for any violations in record keeping.  The FDA didn’t find any product problems during these inspections, just failure to check its multitude of regulatory boxes.

When faced with new FDA manufacturing demands, some companies chose to abandon products that were older and brought in low revenue instead of making expensive upgrades. As the number of competitors dwindles, expect to see more generic drugs become unaffordable—courtesy of the FDA.

 

 

 

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