Senators Decry Mylan’s EpiPen Price-Lowering Tactics As ‘Complex Shell Game’

 Kaiser Health News 

August 31, 2016--In a show of force, 20 Democrats send a letter to the allergy drug maker, demanding answers. They say that the generic price that will be offered by Mylan “is still three times higher than the cost of the branded EpiPen in 2007.”

The Associated Press: 20 Democratic Senators Blast Steep Price Hike For EpiPens
In a sign of growing concern in Congress, 20 Democratic senators are demanding answers about steep price hikes for the life-saving EpiPen injector device. The senators said in a letter Tuesday that price hikes of more than 500 percent have jeopardized access to emergency allergy shots for many Americans. The letter was addressed to Heather Bresch, CEO of the pharmaceutical company that makes the devices, Mylan N.V. Bresch is the daughter of Sen. Joe Manchin, D-W.Va. Manchin did not sign the letter. (Daly, 8/30)

The Wall Street Journal: Senators See ‘Shell Game’ In EpiPen Maker Mylan’s Bid To Ease Access To Allergy Drug
A group of 20 senators called the recent price-lowering overtures from the company that makes the EpiPen emergency auto-injector a “well-defined industry tactic to keep costs high through a complex shell game.” The sheer number of senators – 19 Democrats plus independent Sen. Bernie Sanders – represents a ratcheting-up of the stakes over the dramatic price increases of the emergency epinephrine product from Mylan NV. Mylan has sought recently to quell criticism by announcing discount programs and, on Monday, other plans soon to offer a generic version at half price. (Burton, 8/30)

Morning Consult: Senate Democrats Blast Mylan’s Affordability Moves
The senators, 19 Democrats and independent Sen. Bernie Sanders of Vermont, wrote that the company’s decision to offer a generic version of EpiPens and offer a discount coupon for patients paying the full list price out-of-pocket still results in high costs for patients through insurance premiums. (McIntire, 8/30)

The Star Tribune: Franken Joins Mounting Criticism Of EpiPen Manufacturer 
U.S. Sen. Al Franken of Minnesota has added his voice to the congressional outcry against price increases Mylan pharmaceutical company made to its epinephrine auto-injector that treats potentially deadly allergic reactions. Last week, Sen. Amy Klobuchar of Minnesota called for a Senate Judiciary Committee hearing and asked the Federal Trade Commission to investigate possible antitrust violations by Mylan, which raised the price of a two-pack of its EpiPen product from $100 in 2008 to $500 to $600 in 2016. (Spencer, 8/30)

Los Angeles Times: State Senator Introduces Resolution To Condemn EpiPen Price Hikes
State Sen. Ed Hernandez's attempt to push through a drug pricing transparency bill sputtered this year, but the West Covina Democrat still wants his colleagues to weigh in on the latest controversy in the cost of prescription drugs: the surging price of EpiPens. Hernandez is introducing a resolution that excoriates the anti-allergy device's manufacturer, Mylan, joining a chorus of federal lawmakers who have accused the company of price-gouging. (Mason, 8/30)

St. Louis Public Radio: Epi Pen Price Spike Leaves St. Louisans With Few Options 
So far, [Maureen] Walkenbach’s meticulous monitoring of her son’s food intake has kept her from having to use an EpiPen. But the injectors expire every year, and have to be re-purchased. The Walkenbachs have health insurance, but recently switched to a high-deductible plan. Even with a patient assistance coupon from Mylan, Walkenbach was on the hook for more than $500 for one EpiPen set — a cost she said she’s willing to pay, because going without it would be unthinkable. Instead of three pairs of EpiPens, Walkenbach said the price is forcing her to make do with two — switching one from her kitchen cabinet to her purse whenever she leaves the house. When she forgets it, as she did on a recent trip to the grocery store, she rushes home in a panic.  (Bouscaren, 8/30)

Big Pharma Settlements Highlight the Need for Tougher Enforcement

Public Citizen Report Catalogues 25 Years of Pharmaceutical Industry Lawbreaking; Sharp Decline in Settlements, Penalties in 2014-2015

WASHINGTON, April 5, 2016 - Stronger enforcement is needed to deter pharmaceutical manufacturers from continuing to break the law and defraud federal and state health programs, according to a Public Citizen report released today.

The report – an update to a previous study released in 2012 with additional data through 2015 – catalogues all major financial settlements and court judgments between pharmaceutical companies and federal and state governments from 1991 through 2015, which totaled $35.7 billion.

Of the 373 settlements over those 25 years, 140 were federal settlements totaling $31.9 billion, and 233 were state settlements totaling $3.8 billion. GlaxoSmithKline and Pfizer reached the most settlements and paid the most in financial penalties – $7.9 billion and $3.9 billion, respectively.

From 1991 through 2015, 31 companies entered into repeat settlements with the federal government. The violation resulting in the most federal penalties was unlawful promotion, usually off-label marketing.

Twenty-nine states and the District of Columbia reached at least one single-state settlement with a pharmaceutical company during the 25-year period studied. The most common violation was drug-pricing fraud against state Medicaid programs.

Hawaii recovered the most money as a proportion of Medicaid drug expenditures; South Carolina recuperated the most money per enforcement dollar spent; Louisiana claimed the most single-state settlements; and Texas finalized by far the most whistleblower-initiated settlements.

Another key finding is that both the number and size of settlements decreased significantly in 2014 and 2015. Just $2.4 billion in federal financial penalties were recovered in 2014-2015, less than one-third of the $8.7 billion in 2012-2013 and the lowest two-year total since 2004-2005.

Moreover, there were just 20 state settlements in 2014-2015, the lowest two-year total since 2006-2007. This reflected a dramatic decrease in federal financial penalties for unlawful drug promotion and a similarly sharp decline in the number of single-state settlements stemming from overcharging government health programs.

The report explores several possible reasons for this drop in settlement activity. The possibilities include a decline in federal enforcement; a shift in the focus of federal prosecutions away from off-label marketing and toward other forms of illegal activity, asalluded to (PDF) by U.S. Department of Justice officials in 2012; changes in state Medicaid pharmaceutical reimbursement strategies; and shifts in industry marketing strategies.

“We don’t yet know why there were fewer and smaller settlements in the 2014 to 2015 period,” said Dr. Sammy Almashat, researcher with Public Citizen’s Health Research Group and lead author of the report.

“But we do know that, in addition to the rarity of executive accountability, previous penalties never have been large enough to deter the most common types of pharmaceutical fraud. So it would be surprising if the industry suddenly decided, of its own accord, to comply with laws it has routinely violated for decades.”

The pharmaceutical industry’s $711 billion in global net profits from just one decade (2003-2012) dwarf the $35.7 billion in penalties recovered over the last quarter century.

The largest settlement announced since Public Citizen’s last report – and the third-largest health fraud settlement in history – demonstrates the stark imbalance between the penalties for and the profits made on implicated products.

In 2013, Johnson & Johnson paid $2 billion after pleading guilty to off-label promotion of its antipsychotic Risperdal for use in elderly patients with dementia.

Risperdal brought in $11.7 billion in sales for the company in just the first 12 years after its approval (1994-2005), nearly six times the total settlement amount.

“Breaking the law shouldn’t be profitable, especially not when patients’ health and lives are on the line,” said Dr. Sidney Wolfe, founder and senior adviser to Public Citizen’s Health Research Group.

“The recently reduced settlement activity is still indicative of ongoing, systematic wrongdoing, which is costing American consumers and taxpayers enormous sums and endangering patients. Larger financial penalties, especially for repeat offenders, and jail time for executives implicated in criminal activity might actually change the calculus, so that the consequences of lawbreaking are no longer just a cost of doing business for Big Pharma.”

The report’s authors conclude that federal and state governments need to ramp up enforcement and discuss several more effective strategies to deter future fraud.

Legislation introduced by U.S. Sen. Bernie Sanders (I-Vt.) and U.S. Rep. Elijah Cummings(D-Md.) in September 2015 would terminate any remaining marketing exclusivities, granted by the U.S. Food and Drug Administration, for drugs implicated in illegal activity.

“Time and time again, drug companies defraud American taxpayers while making billions off government-granted monopolies,” Sanders said in response to Public Citizen’s report.

“Enough is enough. The greed of the pharmaceutical industry must end. I urge my colleagues to stand up to the pharmaceutical industry and pass legislation to send a clear message that crime will no longer pay.”