Monday, August 29, 2016

Critical Thinking and the EpiPen Controversy

Here is what we heard on the news lately:  Consumers are shocked at the price increase in EpiPens, the brand name of an epinephrine auto-injector used by those with severe allergies.  In some cases, this is a lifesaving medication that patients are advised to carry with them at all times.  In a more toned down version, the New York Times wellness blog states: “A steep increase in the price of the EpiPen, a lifesaving injection device for people with severe allergies, has sparked outrage among consumers and lawmakers.”

In the business of EpiPens, I am completely disinterested.  No one in my family or circle of friends is affected.  The report made me think, though,  about some healthcare-related issues that reach past the current controversy.

The first is the issue of news media objectivity.  Upon first hearing the wording of these reports – shocked and outraged – they made it sound like the price of the medication shot up overnight.  In reality the price increase, from around $100 to over $600, took place over about eight or nine years at an average compound rate of about 30%.  This is still highly unacceptable, but it did not come as a sudden blow.

Here are the facts according to Elsevier Clinical Solutions’ Gold Standard Drug Database.  A two-pen set had been selling for less than $100 until the pharmaceutical company, Mylan, acquired manufacturing rights in 2007.  By 2009 the wholesale price was up to $103.50 and four years later $264.50.  Last year it was $461, and it went up again to $608.61 this May.  I would think the backlash would have started far sooner than this, but most people are shielded from these incidents by their insurance and it takes a big increase to spark outrage.

Consider the whole insurance mess.  First not everyone pays the full price for a number of reasons.  The USA Today reported:  “The average wholesale price of EpiPen has increased by nearly 500% since 2009, while the price that insurers and employers pay to Mylan is up 150% since 2013, according to Rx Savings Solutions.”  The insurance companies and employers cut their own deals as we all know from looking at our own insurance explanation of benefits (EBO) forms.  There is a price charged and a price allowed by insurance.

The company’s response was to broaden their practice of offering coupons to those who can least afford it, raising the coupon value from $100 to $300 and doubling the income level for eligibility to 400% of the federal poverty level (or $97,200 for a family of four) "for patients in health plans who face higher out-of-pocket costs."  But so far they have refused to lower the price.  So as the New York Times reminds us:  “People without insurance or with high-deductible insurance plans” and those with higher income will still pay full price, around $640.

Meanwhile, a USA Today article cites Martin Shkreli “blaming insurers for not covering the tab.”  In case you don’t recall, he is the one who, while CEO of drug company Turing last year, raised the price of an antiparasitic drug by 5,556 percent in a single move.  He currently faces security fraud charges and is no longer in that position, so why anyone would interview him or trust his judgment is puzzling.

Finally, the USA also states: “There's no generic equivalent and no brand-name competitor.”  But Consumer Reports just a few days ago told a different story:  “to get the low-cost, EpiPen alternative, you can't use a prescription for ‘EpiPen’ from your doctor. That's because pharmacists at your drugstore likely won't be able to automatically substitute the low-cost version if your prescription is written for EpiPen. Instead, ask your doctor to write a prescription for an ‘epinephrine auto-injector’.”  They found this alternative available at WalMart for $142.

What do we make of this jumble of reports?  First, the news media loves to exaggerate, if not misrepresent, situations just to get us worked up.  They talk about shock and outrage, implying a replay of the Turing situation when this case has been developing over several years.  They tell us there is no competition when a little easy research turns up an alternative medication.

Second, you don’t fix healthcare costs by fiddling with insurance (or offering coupons).  The insurance system is broken.  It’s complicated and confusing.  They negotiate their own rates, but the full price remains the full price.  Customers are forced to play by their rules and restrictions, but full price survives and continues to rise at the whim of the providers.  When there is no competition, or the alternatives are unknown or “out of network”, customers have no choice and the system continues to protect the rule makers and the price setters.

We must begin to use critical thinking and calming perspective to question everything we hear from the media, to sort through the hype to get to the real issue.  Remember, they decide not only how to present the news, but what they determine to be news in the first place.  Both decisions have an underlying profit motive.

We must also question everything politicians tell us about a healthcare crisis and proposed solutions.  No amount of insurance manipulation or government bullying will get to the core issues, lack of competition and lack of free choices.  Fixing that situation is the only way to put downward pressure on prices.

1 comment:

  1. September 17 update: Headlines from Fortune: "A Minnesota Doctor Is Trying Get a $50 EpiPen Alternative to Market." It's a lot cheaper and more convenient. This is more evidence of the power of competition over insurance or coupons as a solution to the "healthcare crisis." (Reference:


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