Editor's note: This story was updated with comments from analysts and Public Citizen president Robert Weissman.
Amid a frenzy of criticism for the price of EpiPen, Mylan swiftly expanded its patient assistance programs to help cover out-of-pocket costs. But it didn't adjust the actual price of a med that’s more than 400% more expensive than it was in 2009.
Instead, Mylan said it will pay $300 in out-of-pocket costs at the pharmacy for prescription two-packs, cutting what cash-only patients pay by half. The company also expanded patient assistance, “effectively eliminating out-of-pocket expense for uninsured and under-insured patients.”
In an early attempt to calculate how much the assistance will cost Mylan, Evercore ISI analyst Umer Raffat said it could run $100 million, or about 10% of EpiPen sales. Bernstein analysts said they expect a 20% to 25% hit on EpiPen revenues, creating a 3% to 4% hit to Mylan’s EPS for the next few years.
Both programs come in response to a flurry of negative attention for the drugmaker, first with media reports and tweets, then calls for Congressional investigations into the pricing. Wednesday, the drug price watchdogs at the Senate Special Committee on Aging demanded an “urgent briefing” from Mylan CEO Heather Bresch. And Sen. Charles Grassley issued a letter proposing, among other things, an OTC version of the epinephrine injection.
According to lawmakers, an EpiPen two-pack cost $100 in 2009, but runs $600 in 2016--a cost that patients must bear if their insurance includes a high deductible.
While the programs are a “good start,” Wells Fargo’s David Maris believes they’re “not enough.” He said in a note that investigations and Senate hearings are still a possibility because Mylan’s moves lack “three important components:” lower prices, relief for families who’ve already bought the products and “responsibility and contrition.”
Public Citizen president Robert Wiessman was also left unimpressed, calling the new assistance a "scheme" and a "convoluted effort to avoid plain talk about price," in a Thursday statement.
"It is an excellent example of how corporations are gaming the health care system with elaborate show offers that allow them to continue to price gouge the rest of us," Weissman said.
As Mylan saw competing products fall by the wayside in the last year, it was in a strong position to raise EpiPen's price. In an investor note, Bernstein analyst Ronny Gal said that, in response to continued price hikes, payers “got mad and raised the pain level on patients.” That, in turn, touched off reports of high out-of-pocket costs as parents prepared their children for the upcoming school year.
But Gal said Mylan’s actions haven’t been any different from AbbVie’s strategy with Humira or Sanofi's with Lantus, other than that both of those drugs have much higher impacts on healthcare budgets overall. “That said, payors decided to make an example of Mylan--you run with the bulls, don’t complain if you get the horns,” Gal explained.
Sens. Collins and McCaskill joined an angry chorus of politicians who have decried the price of the epinephrine injections. Senators including Amy Klobuchar (D-MN), Chuck Grassley (R-IA), Bernie Sanders (I-VT), and Richard Blumenthal (D-CT) have either called for an investigation, demanded Mylan lower the price or requested new info. Democratic presidential candidate Hillary Clinton jumped in, calling the episode "the latest troubling example of a company taking advantage of its consumers."
- here's Mylan's release
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