|Why many Americans are being entertained by the hate-filled presidential race, with promises to straighten things up, particularly for the working class, the free market continues to hammer people with the trickle-down barely trickling, stagnant wages, fewer benefits and higher prices. Here Heather Bresch, CEO of Mylan, blames insurance companies and Obamacare for the usurious increase in prescription drugs. -BW
EpiPen Maker Also Hiked Prices on a Slew of Other Medications|
by Dan Mangan, CNBC
And you thought the EpiPen price hikes were big?
The company whose big price increases for its lifesaving EpiPen device are drawing heavy fire from consumers and lawmakers has also sharply raised the prices of a slew of other drugs this year.
Mylan's EpiPen, which counteracts the allergic reaction known as anaphylaxis, has seen a more than fivefold price increase since 2008, with some customers paying more than $600 for a package of two of the auto-injection devices.
Beyond that, "Mylan has taken some exceptionally large price increases in 2016," Wells Fargo senior analyst David Maris wrote in a report in June.
"Mylan has raised the prices more than 20 percent on 24 products, and more than 100 percent on seven products," Maris wrote.
He warned that the Netherlands-based drugmaker — whose CEO Heather Bresch saw her compensation increase by nearly 700 percent from 2007 to 2015 — could draw "greater regulatory scrutiny and headline risk" as a result of such price boosts.
They include a stunning 542 percent increase for the drug ursodiol, which is a generic medication used to treat gallstones.
Maris also flagged a 444 percent increase in another generic drug, metoclopramide, which is commonly used to treat GERD, or gastroesophageal reflux disease as well as gastroparesis. Dicyclomine, a drug used to treat irritable bowel syndrome, had its price jacked up by 400 percent by Mylan.
The price of one of Mylan's biggest selling generics, tolterodine, was increased by 56 percent this year, the Wells Fargo analyst said. Tolterodine is used to treat overactive bladders.
[EpiPen Prices Rocket Along with Drugmaker Executive's Pay]
EpiPen Prices Rocket Along with Drugmaker Executive's Pay 1:11
In contrast, Mylan raised the price of EpiPen, its biggest-selling product, by 15 percent this past spring. However, Maris wrote, that EpiPen price hike "follows two 15 [percent] price increases last year."
A price history of EpiPen assembled by Maris notes that in April 2001, the price of an EpiPen package was $75.80. The device then had a series of 3 percent and 4 percent price increases until 2008, when it was acquired by Mylan.
The company kept the price increases to just 5 percent in 2008 and early 2009, but in October 2009 it raised the price by 20 percent. Then, over the next four years, Mylan increased EpiPen's price by 10 percent eight separate times.
In November 2013, Mylan hiked EpiPen's price by 15 percent, and then did so five more times through May of this year.
As of Tuesday, a package of two EpiPen auto-injectors was selling for $614.07 through a membership warehouse with a free coupon that patients had to download, according to the GoodRx online drug price comparison website. The price was $616 with a coupon at Kroger Pharmacy, $630.96 at Target and $633.66 at Walgreens.
Rodney Whitlock, a consultant for the Campaign for Sustainable Rx Pricing, said Mylan's price increases follow a pattern of other drug companies significantly raising prices for commonly used medications for opaque reasons, at best.
"Think about if other industries behaved the same way. Apple would still be selling the first-gen iPhone for 1,400 bucks."
"It's the everyday drugs that are going up by amounts that are just hard to conceptualize why," Whitlock said. "These drugs aren't improving. They're the same drugs approved by the FDA. They're not getting better. But the prices are going up extensively more than inflation."
"And it's very hard to explain to the consumers why that's the case," he said. "Think about if other industries behaved the same way. Apple would still be selling the first-gen iPhone for 1,400 bucks. And Ford would be selling the Pinto for $84,000."
Drug price increases by two companies drew the attention of Congress, the press and patient advocacy groups last year, Maris wrote.
One was Valeant, whose stock price was pummeled for months after the New York Times reported that Valeant and other firms were using a network of specialty pharmacies to sustain sales of high-priced drugs and prevent patients and insurers from switching to less-expensive generic competitors.
The other was Turing Pharmaceuticals, whose then-CEO Martin Shkreli raised the price of the antiparasitic medication Daraprim by more than 5,000 percent. Shkreli was indicted late last year on federal securities charges that are unrelated to the Daraprim controversy. He has pleaded not guilty to the charges.
In his report on Mylan, Maris wrote that while some of the products "may be small relative to Mylan's overall business, we do not believe that the price increases come without a real cost to patients."
"And if this turns to headline risk, the could be an impact to reputation and shareholders as well," Maris wrote in June. "In this environment, we believe 400 percent and 500 percent price increases on products are beacons for scrutiny."
Earlier this week, Senator Amy Klobuchar, saying she was outraged by the price increases for EpiPen, asked the Federal Trade Commission to investigate. And her colleague, Senaor Chuck Grassley of Iowa, chairman of the Judiciary Committee, has written Mylan asking how it determined prices for EpiPen.
Mylan has not yet responded to any request for comment.
On Monday, Mylan noted in a statement that many patients can get access to EpiPens at no cost to themselves through discount programs offered by the company.
Mylan also said that changes in the health insurance "landscape" have led to increasing numbers of people being covered by so-called high-deductible plans, which require them to pay more personally out of pocket for doctor's visits and medications.
"This current and ongoing shift has presented new challenges for consumers, and now they are bearing more of the cost," Mylan said. "This new change to the industry is not an easy challenge to address, but we recognize the need and are committed to working with customers and payors to find solutions to meet the needs of the patients and families we serve."
Doug Hirsch, co-founder and co-CEO of GoodRx, the drug price comparison site, said, "When consumers perceive that the cost of drugs is going up, often it's just their share of the costs that are going up. ... We see that all the time at GoodRx."
But he acknowledged that the price hikes are real, even in cases where an EpiPen user is not paying anything out of pocket for the devices.
"You may be paying zero, but your company may be paying $500 for that EpiPen," Hirsch said.
When asked about the array of price increases at Mylan, Hirsch said, "I'm never surprised by changes in drug pricing ... in this space, it's always more complicated and complex than you can imagine."
Hirsch said that the price hikes of EpiPen, at least in part, seem to be the result of the recall last year of Sanofi's competing product Auvi-Q, and the denial of regulatory approval for a generic competitor from Teva.
"I think we're seeing a classic scenario that we see in the drug world, which is less competition equals higher prices," he said.
Dan Mangan, CNBC.