Congressional outrage over the soaring cost of EpiPens paved the way for massive civil settlement and a half-price generic alternative to hit the market, but the GOP senator who led the push says there’s more work to do in a Trump administration, as Americans continue to suffer from climbing drug prices across the board.
EpiPens, which deliver life-saving relief to those who go into allergic shock, were just one of the drugs to face scrutiny on Capitol Hill in 2016, as consumer advocates said pharmaceutical companies were gouging American customers for no reason other than profit.
High-profile hearings also turned Martin Shkreli into a national punching bag after he hiked the price of a drug from $13.50 to $750 during his time as CEO of Turing Pharmaceuticals, and the chief of Valeant Pharmaceuticals International publicly admitted to “mistakes” for buying the rights to drugs in order to hike their prices.
But it was the EpiPen episode that hit home and dominated the headlines, with parents of children with allergies wondering why Mylan, the manufacturer, had raised the price from $100 for a twin pack in 2009 to more than $600 this year.
Senate Judiciary Committee Chairman Chuck Grassley, who led one of Congress’ probes, is trying to enlist President-elect Donald Trump to get his administration on board early, hoping to speed alternatives that can drive down prices.
“Many of these drugs do not have competitors in the market, not because they don’t exist, but because safety and regulatory approvals have been slow,” the longtime Iowa Republican lawmaker said in a recent letter to Mr. Trump. “For example, generic versions of the EpiPen are undergoing additional FDA questioning and have yet to be approved.”
Senate Democrats issued similar calls in a letter of their own, saying Mr. Trump should follow through on his promise to slash drug prices by allowing the Department of Health and Human Services to negotiate drug prices under Medicare and speeding generics to the market, among other reforms.
Until Mr. Trump takes office, Congress is using its own ability to shine a spotlight on egregious cases to try to win changes.
Last fall lawmakers fumed after parents and schools said they were reeling from a sharp increase in the price of the epinephrine auto-injectors, which help people with severe allergies stave off anaphylactic shock. The high-profile pressure had an immediate effect: While it didn’t slash its list price, Mylan expanded its assistance programs for needy families and launched a generic version of its pens at half-price, or $300.
The company told Mr. Grassley it expects more than 85 percent of prescriptions will shift to the generic version slated to hit pharmacy shelves around Christmastime, potentially saving patients and insurers more than $1 billion.
“Due to the focus on EpiPen price increases, Mylan has issued more help for consumers through discount cards and the forthcoming authorized generic version of the product. The scrutiny has helped to bring focus from Congress and President-elect Trump to high drug prices,” Mr. Grassley said in a statement to The Washington Times on the outcome of his probe.
Classifying errors
The EpiPen inquiry also revealed potential errors in how the government classifies drugs.
In October Mylan agreed to pay $465 million to settle claims it shortchanged taxpayers by classifying its popular EpiPen as a generic instead of a brand-name product — a move that allowed it to pay smaller rebates to states under Medicaid, the government insurance program for the poor.
Manufacturers pay states a 23.1 percent rebate on brand-name drugs compared to 13 percent for generics.
The company did not admit any wrongdoing in the settlement with the Justice Department, which came just days after the Centers for Medicare & Medicaid Services said the company had misclassified the life-saving device.
As part of the fallout, the Health and Human Services Department’s inspector general recently told Mr. Grassley it plans to review Medicaid’s classification data for additional errors or lack of compliance with its requirements — potentially leading to price cuts on other popular drugs.
“The executive branch must use its existing authorities to hold companies accountable for misclassifications,” Mr. Grassley told Mr. Trump.
For her part, Mylan CEO Heather Bresch blamed the health care system for much of the dustup over EpiPens, saying consumers are feeling financial pain because of a shift toward high-deductible insurance plans that force consumers to pay for drugs out of their own pocket.
“Unfortunately, families will continue to face sticker shock for medications and may be forced to make difficult choices until the pharmaceutical pricing system is reformed to address the increasing shift of costs directly to consumers,” she said in announcing the EpiPen generic.
She also told Congress that Mylan, located in the Netherlands for tax purposes but run from Canonsburg, Pennsylvania, takes home only $100 of the $608 list price for each two-pack — or $50 per pen — after a Byzantine web of rebates, fees and material costs eat into their profits.
Yet lawmakers said a lack of competition was to blame for high prices, particularly among older drugs where a manufacturer has a monopoly, so Congress should look at ways to speed up the approval process.
In his letter to Mr. Trump, Mr. Grassley highlighted the backlog of generic applications at the FDA, and that HHS has the authority to increase importation of prescription drugs from Canada and other countries.
A recent report by the Senate’s Special Committee on Aging highlighted legislation that would require the Food and Drug Administration to approve or decline applications for generic competitors to these drugs within 150 days.
“I do think we’re starting to see movement toward legislative remedies. There’s no one magic bullet. You could do lots of different things,” said John Rother, president and CEO of the national coalition on health care.
“They would restore a more working market in pharmaceuticals,” he added. “It’s not government price-setting, it’s making the market work.”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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