Patient Assistance Program Allows Company to Increase Drug Prices While Passing Costs onto Insurance Companies and Consumers

WASHINGTON, DC — In a letter sent today to the CEO of pharmaceutical company Mylan, U.S. Senators Jack Reed and Sheldon Whitehouse, along with 18 of their Senate colleagues, expressed their serious concerns about the company’s significant price hikes for the life-saving EpiPen Auto-Injector. The Senators raised questions about Mylan’s decision to expand its patient assistance program, which allows the company to sharply increase prices while passing the cost of these increases onto insurance companies and ultimately to consumers, and to introduce an authorized generic EpiPen at more than half the price of the branded EpiPen. The letter was signed by Senators Elizabeth Warren (D-MA), Tammy Baldwin (D-NY), Richard Blumenthal (D-CT), Barbara Boxer (D-CA), Sherrod Brown (D-OH), Joe Donnelly (D-IN), Richard J. Durbin (D-IL), Al Franken (D-MN), Heidi Heitkamp (D-ND), Mazie K. Hirono (D-HI), Amy Klobuchar (D-MN), Patrick Leahy (D-VT), Edward Markey (D-MA), Chris Murphy (D-CT), Bernie Sanders (I-VT), Brian Schatz (D-HI), Jon Tester (D-MT), Tom Udall (D-NM).

“The EpiPen…has become so exorbitantly expensive that access to this life saving combination product is in jeopardy for many Americans,” the Senators wrote. “Mylan’s near monopoly on the epinephrine auto-injector market has allowed you to increase prices well beyond those that are justified by any increase in the costs of manufacturing the EpiPen.”

“When patients receive short-term co-pay assistance for expensive drugs, they may be insulated from price hikes, but insurance companies, the government, and employers still bear the burden of these excessive prices. In turn, those costs are eventually passed on to consumers in the form of higher premiums, but the drug company is no longer in the spotlight. Because couponing can massively inflate costs, this practice has been outlawed by the government in Medicare and Medicaid. But couponing practices are perfectly legal for commercial insurance and Affordable Care Act exchange coverage,” the letter notes.

The Senators requested that Mylan answer a series of questions to provide additional information about the impact that the EpiPen price hike and the associated changes in Mylan’s patient assistance program and other accessibility programs will have on consumers and on taxpayers.

The letter also questioned Mylan’s August 29th announcement of their intent to create a $300 generic of the EpiPen, noting that while the availability of a $300 generic will ease the financial burden on some insurers and consumers, the price is still three times higher than the cost of the branded EpiPen in 2007. And Mylan asserts that the generic is “identical to the branded product”—further calling into question the excessively high price of the branded EpiPens, as well as Mylan’s rationale for selling both a branded and generic version of the device.”

Senator Reed is also calling for Congress to hold comprehensive hearings on the pricing issue and for bipartisan action to stop corporate inversions like the one Mylan undertook in 2014, when it moved its corporate address overseas to the Netherlands to avoid paying U.S. taxes. Reed stated: “Countless Rhode Islanders and families across America depend on EpiPens to save lives. The company’s onerous price hikes are unfair to these families and harmful to our overall health system. And Mylan’s recent inversion to dodge paying its fair share of taxes shows that Congress must work together to make needed tax reforms. I urge the company to roll back its unjustified price increases, and I will work with my colleagues in Congress to prevent this type of situation from reoccurring.”

“The sky-rocketing cost increase of the EpiPen is just the latest evidence that our regulation of prescription drug pricing is broken,” said Senator Whitehouse. “It allows pharmaceutical companies to extract monopolist profits, gouging Rhode Islanders for products that were profitable at much lower prices. We can complain about Mylan, and Valeant before that, but right now the system is rigged by the pharmaceutical industry to allow this price-gouging, and that is what needs to be corrected.”

Read a PDF copy of the Senators’ letter here.