Senators Have New Questions for Mylan About EpiPen Price Hike, Pricing Strategy

WASHINGTON, D.C – In a 13-page letter sent to the CEO of pharmaceutical company Mylan, 17 senators requested additional information about the company's recent EpiPen Auto-Injector (EpiPen) price increases and how Mylan's pricing strategy affects consumers, taxpayers, and insurance premiums. The letter follows a previous request for information made in August about the EpiPen price hike. The letter was signed by Senators Tammy Baldwin (D-WI), Elizabeth Warren (D-MA), Richard Blumenthal (D-CT), Barbara Boxer (D-CA), Sherrod Brown (D-OH), Richard J. Durbin (D-Ill.), Al Franken (D-Minn.), Kirsten Gillibrand (D-N.Y.), Mazie K. Hirono (D-HI), Amy Klobuchar (D-MN), Patrick Leahy (D-VT), Edward J. Markey (D-MA), Chris Murphy (D-CT), Jack Reed (D-RI), Bernie Sanders (I-VT), Tom Udall (D-NM), and Sheldon Whitehouse (D-RI).

Mylan’s response to the August letter revealed that:

• Mylan’s My EpiPen Savings Card and Patient Assistance Program do not help the vast majority of EpiPen users – in fact, the free product provided through the Patient Assistance Program touted by Mylan represents less than 1% of all EpiPens sold.
• The majority of EpiPen’s cost increases appear to have been borne by taxpayers, via higher costs for programs like Medicare and Medicaid, and by employers and insured patients, via higher premiums.
• Mylan’s pricing system is complex and non-transparent, allowing the company to segregate consumers into different categories, charging different prices to different customers while shielding some customers from price increases and shifting costs to others.

Mylan, however, failed to provide important information needed to put these findings in context.  The senators explained in today’s letter to Mylan that they “remain frustrated with both the lack of information and lack of clarity in your response, and your insistence that you are not aware of basic facts about sales of your own drug to Medicaid and Medicare Part D.”

The letter seeks additional information on Mylan’s pricing strategy, particularly after Mylan provided information revealing a significant gap between the listed Wholesale Acquisition Cost for EpiPen and what consumers actually pay, and that the company is manipulating prices in order to maximize its revenue. “Mylan appears to be engaging in practices that shield some consumers from price increases and high deductibles while shifting these costs—both directly and indirectly—to others.  The net result of this process is profitable for Mylan—but these increased revenues come at a significant cost to consumers and taxpayers.” 

The letter requests that Mylan provide answers to a series of questions about its pricing strategies for four different groups of customers – the uninsured, Medicated patients, Medicare patients, and patients with employer or Affordable Care Act insurance coverage – and how the company’s approach to pricing affects its revenue and patient access to the EpiPen.

In September, Senator Baldwin introduced bipartisan and bicameral legislation with Senator John McCain (R-AZ) and Representative Jan Schakowsky (D-IL) to require transparency and accountability for drug corporations that increase prescription drug prices. Specifically, the Fair Accountability and Innovative Research (FAIR) Drug Pricing Act would require drug manufacturers to notify the U.S. Department of Health and Human Services (HHS) and submit a transparency and justification report 30 days before they increase the price of certain drug products by more than 10 percent. The report will require manufacturers to provide a justification for each price increase, manufacturing, research and development costs for the qualifying drug, net profits attributable to the qualifying drug, marketing and advertising spending on the qualifying drug, and other information as deemed appropriate. The bill will not prohibit manufacturers from increasing prices, but it will, for the first time, give taxpayers notice of price increases and bring basic transparency to the market for prescription drugs.

A copy of the letter the senators sent is available here.