
EpiPen Maker Quietly Steers Effort That Could Protect Its Price - uptown
http://www.nytimes.com/2016/09/16/business/epipen-maker-mylan-preventative-drug-campaign.html
======
bradleyjg
This whole drug company argument -- that the only thing that really matters is
what end users pay as a co-pay or co-insurance and that no one should care
what insurance companies (including governments) pay -- is so breathtakingly
bad I can only imagine it is in bad faith. Where do they expect us to believe
the institutional payments are coming from, out of thin air?

~~~
codegeek
This. Exactly This. I am sick of hearing "oh you just pay $20 co-pay". No we
don't. The real cost is much more and these pharmas and insurance companies
know it. I know because I paid it for a family of 4. It costs $1500/Month for
a decent plan that does not have high "out of pocket" costs (Read capped at
$5000). So you pay $1500 per month and in worst case scenario, you can still
pay $5000 out of pocket for a year IF the insurance company does not deny a
claim.

I usually don't make political comments but one thing that was disappointing
with Obamacare was the fact that it did not address this root cause and
instead touted that now anyone can get insurance. Sure, someone with pre-
existing condition is now probably a little better off but overall, obamacare
did not address the main issue: getting rid of middlemen (insurance companies)
and let doctors/hospitals work on fair and transparent pricing. Isn't that
what America is all about ? Free Market, eh.

If I may steal the legendary MLK's words, I have a dream. A dream where I can
call any doctor/hospital and ask what will it exactly cost to get a simple
X-Ray done without saying "Oh no, I ain't got no insurance". Just a dream.

~~~
rayiner
Transparent medical pricing is not possible so long as hospitals have an
obligation to treat sick people whether or not they can pay. Hospitals
_heavily_ cross subsidize between insured, uninsured, and Medicare/Medicaid
patients. As long as we put expectations on doctors and hospitals that compel
them to do that, they cannot provide transparent pricing.

~~~
dota_fanatic
The work done by David Belk MD shows that these costs are an extremely small
cost of hospitals, and that you're basically promoting a myth. [1][2]

He directly addresses the inaccuracy of that claim in the following 10 minute
video, "The $55,000 Appendectomy: What Everyone Should Know About Hospital
Bills". [3]

[1]
[https://www.reddit.com/r/IAmA/comments/4lgnif/i_am_david_bel...](https://www.reddit.com/r/IAmA/comments/4lgnif/i_am_david_belk_im_a_doctor_who_has_spent_the/)

[2]
[http://truecostofhealthcare.net/conclusion/](http://truecostofhealthcare.net/conclusion/)

[3]
[https://www.youtube.com/watch?v=jkAY15p2DN4](https://www.youtube.com/watch?v=jkAY15p2DN4)

~~~
Declanomous
I'll have to check that out. My primary care physician is located at a
teaching hospital that is surrounded by extreme poverty. A few years ago he
said that I was one of the few patients that have insurance, and one of the
few that comes in for preventative treatment (no surprise, given the lack of
insurance). This isn't emergency treatment though, this is normal doctors
stuff, the hospital he works for makes a point of treating everyone.

Even so, my last visit was less than $100, including blood work. There wasn't
even an in-network discount or anything. So I doubt I'm subsidizing anyone,
and I don't think the hospital is suffering too much from treating everyone.

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StefanKarpinski
How can any article about this issue not mention the word "patent" anywhere?
Why is a 1970s technology still under patent? Patents are supposed to allow
recouping of R & D costs, not grant an effectively permanent monopoly that can
be sold over and over again until someone greedy enough does the inevitable –
if we grant that sort of long-lived monopoly, what else can we possibly expect
to happen? Reform the broken patent system and this problem vanishes due to
natural competition. This patent reform isn't even a hard one: stop allowing
patents to get extended indefinitely (with or without minor modifications).

~~~
anexprogrammer
If no one is making a generic, or more to the point doctors are prescribing
"EpiPen" rather than "epinephrine autoinjector" being out of patent won't
help.

In the UK doctors had to switch to prescribing generics I think as far back as
the 80s. Brands are now only prescribed, with a few exceptions, when it's
something new enough to not have a generic yet. Before that lots of things
were often prescribed by brand without good reason.

~~~
maxerickson
My experience in the US is that doctors prescribe drugs with generic
alternatives anytime they can. I'm not sure if I've ever even taken a branded
prescription pill.

~~~
importantbrian
Yeah, my old doctor would always prescribe generics, and if he knew you were
hard up and might not even be able to afford the generics he would try to get
samples from the reps anytime he could and just give them to you.

------
maxerickson
Does the FDA have the authority to deny marketing approval for minor
improvements?

Mylan pushed generics off the market by making a better cap or something, the
FDA should just say no, that improvement is nice but it isn't enough to give
you exclusive marketing rights. If you want to incorporate it into your
product, license it to your competitors for cheap.

~~~
bradleyjg
>> Does the FDA have the authority to deny marketing approval for minor
improvements?

They certainly don't. Look at Nexium, it is something close to a blatant scam
but the FDA approved it and between Medicare and Medicaid alone the federal
government has rewarded the scammers (AstraZeneca) with billions of dollars
never mind private insurance companies.

~~~
JustSomeNobody
Honest question, how is Nexium a scam?

~~~
bradleyjg
Omeprazole is a mixture of two mirror image molecules. One of the two versions
is the active and the other isn't (for 97% of the population). When the patent
was running out on omeprazole AstraZeneca patented esomeprazole, which is just
the active isomer. In order to show improvement over omeprazole they did
clinical trials that used a higher effective dose of esomeprazole than
omeprazole. The FDA, for reasons unknown, let them get away with this fraud
and approved the drug.

The government has spent literally billions of dollars buying esomeprazole
when a double dose of omeprazole is the same damn thing for 97% of the
population. I caveated my original statement ("something close to") because
there might be some role for esomeprazole as a second line drug for the 3% of
the population that is sensitive to the other isomer, but even there a
perfectly fine alternative would just be a lower dose of omeprazole.

Nexium is 18th on the list of drugs by global sales in 2014. These are not
small potatoes.

~~~
sseagull
>One of the two versions is the active and the other isn't (for 97% of the
population)

My understanding is that the inactive form is actually metabolized into the
active form by the body.

There is _some_ argument that this happens differently in different people.
But if AstraZeneca knew this (which they almost certainly did), why didn't
they release esomeprazole at the beginning? They released omeprazole first,
then sat on esomeprazole until the omeprazole patent was about to expire. It's
obvious why they would do that.

------
squozzer
>Mylan was actively involved in pushing a 2013 federal law encouraging schools
nationwide to stock EpiPens. And the company takes credit for legislation in
at least 10 states that require the product in hotels, restaurants and other
places, and additional school-related legislation in nearly every state. It is
also helping push legislation pending in Congress that would require
epinephrine auto-injectors on all commercial airline flights.

It would seem to me that a government-mandated market expansion would require
a counter-balancing price regulation, but maybe my sense of reciprocity is
misplaced.

~~~
charlesdm
They probably conveniently forgot that..

------
amluto
One thing that really annoys me is the fact that drug makers can refund the
co-pay to customers. In the auto repair industry, I believe this has a name:
insurance fraud.

~~~
FireBeyond
That's a very specific thing.

The co-pay is a part of the price of the product that your insurer doesn't
cover, so technically it's not theirs to begin with. Which is also why it's
not a refund of the deductible paid, because that -is- considered part of the
insurance contribution, i.e:

(deductible paid by customer + insurance payment) = your insurance
contribution co-pay = your personal contribution to the cost of the treatment.

~~~
aianus
It's obviously fraud. If your windshield breaks and your deductible (co-pay)
is $500, I can't quote you $500 above market rate to fix it and give it back
to you in cash to stick it to your insurance company.

~~~
FireBeyond
Your deductible is not your co-pay.

Deductibles, co-pays, and co-insurance are all separate things with specific
definitions:

A deductible is a portion of covered medical expenses that the insured must
pay. It is specifically defined as the amount of covered benefit that must be
incurred and paid by the insured before benefits become payable by the
insurer.

Key in the above is "a portion of covered medical expenses".

A copayment is a flat dollar amount that the insured pays each time a certain
kind of service is received. The copayment is not a percentage of the total
cost, as it is in coinsurance, but rather is always the same dollar amount
even though the cost of the service may vary (a pharma co-pay of $x,
regardless of the variable drug price).

It may seem like nit picking, but there are specific reasons for the
difference.

Source: myself, who writes and maintains health insurance claims management
and adjudication software.

This is all separate to your claim: of course, if your doctor agreed to charge
you $x+200 (leaving aside the reality of negotiated and contracted fee
schedules) and refund you that $200, then absolutely yes - this is insurance
fraud.

However, the co-pay does not form part of the insurance coverage.

~~~
aianus
> This is all separate to your claim: of course, if your doctor agreed to
> charge you $x+200 (leaving aside the reality of negotiated and contracted
> fee schedules) and refund you that $200, then absolutely yes - this is
> insurance fraud.

If you charge $X more for an Epipen vs. the market rate for a generic
epinephrine autoinjector but offer a $X discount for uninsured persons (or a
smaller $Y discount for those with copays or deductibles), it is the same
scam.

Maybe not legally, but effectively.

~~~
FireBeyond
What you need to remember in this case is that the delineation comes FROM the
insurance company. They wash their hands of the co-pay entirely and say "no,
we+your deductible are covering this (part of the cost)". That becomes the
insurance benefit in total. Your co-pay also comes out of your pocket,
entirely separately.

There's no fraud, because that's how the insurer defined the separation
themselves (for other reasons).

------
fjejfjrjdjc
I've been waiting to see a neurologist for a serious and worsening vision
problem since May. For those keeping track, that's four and a half months. So
between these high drug prices and low healthcare availability, why exactly
are we so afraid of single payer again?

~~~
mhb
How does single payer create an incentive for increasing the neurologist
supply?

~~~
fjejfjrjdjc
By turning healthcare into a humanitarian mission instead of a business
venture. My local clinic is for-profit and found that it made better business
sense to only have the most rudimentary neurology department possible since it
tends to be expensive. Instead they focus on their financial bread and butter
like flu shots and annual checkups.

~~~
rayiner
Humanitarian missions and charity are notoriously ineffective at achieving
real change. See, for example, the utter failure of aid organizations to
achieve any fundamental changes in Africa. Meanwhile, big drug companies and
their anti-retro viral cocktails changed the course of the AIDS epidemic there
almost overnight.

~~~
fjejfjrjdjc
And yet I continue to go untreated thanks to the profit motive...

~~~
witty_username
So? Money is a representation of human effort. Nobody wants to work for free
or invest for 0% gain.

Is there a reason you think the price should be lower? (remember people
working need money too)

~~~
fjejfjrjdjc
If you had studied economics, you would know that profit and income are
fundamentally different concepts. The existence of profit (rather than
breaking even) implies a market failure.

~~~
tptacek
I think you're confusing "profits" with "rents".

------
mdrzn
It's not a "quietly effort", Martin even said that this would be the best
course of action on live TV[0]. The government will spend more money, but the
public will get it for free. Of course there's two side to every story, but I
think I choose to believe Shkreli on this.

[0] -
[https://www.youtube.com/watch?v=RoMlxVimwiU](https://www.youtube.com/watch?v=RoMlxVimwiU)

~~~
ceejayoz
> The government will spend more money, but the public will get it for free.

You know where the government gets its money, right?

~~~
witty_username
So what if taxpayers are paying for it? Companies need to make a profit.

Is there a specific reason why the price is unreasonable? (don't anchor the
previous price)

~~~
ceejayoz
> So what if taxpayers are paying for it?

People are _not_ getting it for free, as you argued.

> Is there a specific reason why the price is unreasonable?

It is a clear case of price gouging and a harm to public health.

> (don't anchor the previous price)

Do I get to forbid you from making arguments too?

------
throw2016
Lobbying, crooked NGOs, corruption, price gouging. There is something
completely rotten in the US healthcare system.

If this were free markets and capitalism, wouldn't the response be a flood of
alternatives at 1/100 or even 1/10 the price since the base ingredient costs
pennies, and not this self serving and crafty effort to leech tax payer
subsidies? This is organized corruption.

When you let people feed on others desperation you create demons. This is the
biggest argument for socialized healthcare.

------
sleight42
As a pharmacy company, wanting to charge a higher price for my products,
doesn't it sound like an excellent strategy to outrage my customers, get them
actively protesting, only to present a solution that many of those outraged
customers will support while continuing to allow me to charge my higher price?

This feels like a House of Cards-like strategy: take up an unpopular selfish
position only to later use its most vociferous opponents as leverage in
maintaining that strategy.

------
throwawayLink
This is why we need alternatives. Vote with your money:

[https://www.indiegogo.com/projects/allergystop-affordable-
ep...](https://www.indiegogo.com/projects/allergystop-affordable-epinephrine-
injection-health#/)

~~~
ceejayoz
I see little indication that that doctor has any experience getting a medical
device through the FDA and manufacturing. Couple that with the flexible
funding goal and that looks pretty damned scammy.

------
davidf18
The solution to the cost problem is for competition to enter the market. It is
my understanding FDA has in some way restricted market entry as competing
firms (eg, generic giant Teva) come up with a device acceptable to the FDA.

------
bcheung
The government created this problem in the first place by granting monopolies
on drugs. If it allowed others to manufacture it, the price would drop.

------
jfb
Rent-seekers seek rents, dog bites man, &c. &c.

------
ericfrederich
Love or hate the guy, but Martin Shkreli has a good point here on the EpiPen:
[https://www.youtube.com/watch?v=RoMlxVimwiU](https://www.youtube.com/watch?v=RoMlxVimwiU)

Basically:

    
    
      That $600 is a value to save your life
        - much cheaper than an ambulance / hospital stay
    
      That insurance companies should cover 100% of it

~~~
mikeyouse
That's a terrible point and could be used to justify $10,000/dose EpiPens.

------
lettergram
Having multiple deadly allergies and needing to purchase EpiPens regularly,
their price doesn't seem outrageous to me.

I pay about $10 a pen, insurance pays about $100 per (even after the price
increase). That being said, people rarely use this drug. $100 to save your
life once a year or so kind of seems like a fair trade.

This seems more like the media is outraged as opposed to the country. All my
friends don't even know about this price change, I only know about it because
I read the news more often.

~~~
jackmott
How much does your insurance plan cost you per year? If your employer pays it,
ask them how much they have to pay.

Part of the reason it is so expensive is because of monopolistic pricing on
many drugs and treatments.

You are paying way more than $100

Also you have to buy more than one because they expire.

~~~
cylinder
You don't need to ask, it's on your W2.

~~~
codegeek
yep. Look for "code DD in Box 12 of W-2". That is the total cost you and your
employer paid together.

------
mtgx
Relevant post:

[http://www.forbes.com/sites/realspin/2016/09/14/government-h...](http://www.forbes.com/sites/realspin/2016/09/14/government-
hypocrisy-over-epipen-the-pot-calling-the-kettle-black/)

It's Forbes, but the argument is backed by the recent Harvard study:

[http://jama.jamanetwork.com/article.aspx?articleid=2545691](http://jama.jamanetwork.com/article.aspx?articleid=2545691)

~~~
tuna-piano
They look at the symptom, and might fix one case of high prices with public
pressure, legal threats, etc - but if the system is broken, then what good is
that?

The question is not "why is this company so evil and greedy?" It's "why dont
McDonald's hamburgers also cost $600?", and how do we make the market for
drugs as competitive as for burgers?

~~~
pravda
>It's "why dont McDonald's hamburgers also cost $600?", and how do we make the
market for drugs as competitive as for burgers?

Because insurance doesn't pay for McDonalds. To make the market for drugs
competitive, step one is to get rid of health insurance. Or at least health
insurance coverage for drugs.

I think the going price for an iPhone is $700. How much would an iPhone cost
if you only had to pay 20% of the price?

Do the math, and now THAT's why drugs are so expensive.

------
tn13
And what does NYT expect him do to ? Open a charity, raise a kickstarter to
provide free EpiPens ?

I hope he makes a fortune and inspires more to come up with those kind of
drugs.

~~~
jackmott
Her. We expect her to be out of a job when healthcare becomes socialized, then
she can move into the financial sector and rip people off there.

~~~
tn13
And if the healthcare becomes socialized who will make EpiPens ?

~~~
mikeyouse
The same company that currently makes them? Single-payer doesn't mean the
government is going to try and run pharma manufacturing.

~~~
tn13
But without the incentive to make awesome windfall profits there wont be any
EpiPens to begin with.

