Mylan Pharmaceuticals has found itself at the center of controversy with its pricing of the EpiPen.
EpiPens are used in emergencies to treat severe allergic reactions to insect bites and foods like nuts that can lead to anaphylactic shock. They are auto-injectors, or spring-loaded syringes that provide a single dose of the drug epinephrine, and can be administered by patients themselves or untrained people.
Since 2009, Mylan has jacked up the price of the lifesaving allergy treatment 15 times. The list price on a two-pack of EpiPens is $609, up 400% from seven years ago.
Feeling pressure from the public, Mylan has launched a generic version of the EpiPen at a 50% discount over its current price in the coming weeks.
“No one’s expecting Mylan to give away their products. But empathy is the most human emotion. And when you raise price year after year — by a lot — for a drug that’s lifesaving, it shows a complete lack of empathy,” said Wells Fargo analyst David Maris.
Maris also points out that no one forced Mylan to dramatically raise EpiPen prices.
“It’s outrageous. People shouldn’t be fooled by the idea that the system made them do it. Mylan is to blame for the high prices of EpiPen,” Maris said.
In fact, the most recent round of price hikes look more opportunistic, rather than the result of problems in the health care system.
In November 2015, Mylan raised EpiPen prices by 15% (for the 14th time since 2009). The hike came just a month after the drug’s main rival Auvi-Q was pulled off the market. Six months later, the company jacked up prices again, by another 15%.
“With competitors out of the market, Mylan was in a position to price up EpiPen, which they did,” Bernstein analysts wrote in a recent report.
Mylan’s defenders note that the $609 list price of EpiPen may get all of the attention, but most consumers don’t actually pay that. Even before Mylan’s recent cost-cutting moves, the company has indicated that 80% of its prescriptions translate to $0 out-of-pocket expenses.
Just 4% of EpiPen prescriptions actually led to $600 or more in out-of-pocket expenses, according to an analysis by Evercore analyst Umer Raffat. However, that still translates to a significant 150,000 prescriptions at that high price, Raffat said.
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Subpoenas for company information were issued last week.