Heather Bresch, the CEO of Mylan — which makes the EpiPen — was grilled by the House Oversight and Government Reform Committee about the drug’s price on Wednesday.
The price of the device, used in emergencies to treat severe allergic reactions, has increased more than 500% since Mylan acquired it in 2007. A two-pack of the EpiPen now has a list price of $608.
The whole experience was filled with yelling, frustration, and a whole lot of EpiPens and poster board charts.
The members of Congress had a lot of questions for Bresch, who testified alongside Doug Throckmorton, a deputy director of the Food and Drug Administration.
What got answered
How much does Mylan make per EpiPen in profit?Because there are a number of middlemen involved between the list price (that’s the $608 for a two-pack) and what Mylan actually gets, Congress Using poster boards, Bresch tried to illustrate the point that Mylan currently makes about $275 off of each two-pack of EpiPens, with a profit of about $50.
In 2014, when the list price was about $400, Bresch said the company got $235 from each two-pack, and about $40 in profit off each. Bresch said that the $300 authorised generic would make less than the $50 profit that the company is making today.
- How much does it cost to make an EpiPen? Bresch said that the company pays a manufacturer $69 per device, but when you add in marketing and awareness efforts, it comes out to about $105.
- Will the EpiPen ever come down in price? A number of senators tried to get Bresch to get to the heart of this question, but all they got was that Mylan thought it would be more effective to introduce an authorised generic for $300, which is essentially the same thing but can be distributed more directly to patients. That would cut out some of the middlemen who influence the list price.
- Why can’t the FDA disclose how many generic versions it’s reviewing? The members of the committee got pretty peeved when Throckmorton couldn’t say how many EpiPen competitors were currently under review. He insisted that it would be illegal to say. The FDA followed up later via Twitter, saying that they don’t disclose how many pending applications they have — even without naming names — because combined with information that’s already public, that could make it possible to figure out which are in the review process.
- What updates has Mylan made to the actual EpiPen? Bresch mentioned that Mylan was working on developing an EpiPen with a longer shelf life. Currently, the EpiPen expires after about 12 months, and Bresch said that the hope is to increase that to 24 months.
What got even more confusing
What role does the PBM play in all of this? Pharmacy benefits managers are the ones that set effective drug prices, working with drugmakers and insurers to negotiate down the list price. For example, in February, CVS, one of the largest PBMs, said it managed to keep the lid on rising drug prices, with an increase of only 5% in 2015. But toward the end of the hearing, the concept of the PBM got a bit muddled. The committee asked Mylan for more specifics on the company’s contracts with these companies.
- What the heck is in the $180 billion value Bresch cited as saving the US? When asked what the impact of the EpiPen has been, Bresch cited $180 billion as the amount of money the EpiPen has saved the US healthcare system. Presumably, this could be how much anaphylaxis — the severe allergic reaction that can send people to the emergency room — costs if someone doesn’t have an EpiPen handy to prevent it.
- What’s the story with Mylan’s patient assistance programs? This is something that Sen. Elizabeth Warren wants more answers on from the pharmaceutical industry as a whole. Bresch did not provide many specifics.
- How many schools paid for EpiPens? Mylan has given free EpiPens to 66,000 schools, and said it’s sold 45,000 EpiPens to schools at a discounted rate, though Bresch wasn’t able to say how many schools purchased those 45,000 EpiPens.
- Will the price of the EpiPen go up in 2017? Bresch said the company didn’t plan to do this, but it will remain to be seen. Bresch also didn’t answer the question directly whether Mylan had a six-year plan to consistently raise the price of the EpiPen.
For the full play-by-play of yesterday’s four-hour hearing, check out our live coverage.
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