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Feds Go After Mylan For Scamming Medicaid Out of Millions On EpiPen Pricing (arstechnica.com)
An anonymous reader quotes a report from Ars Technica: Over the nine or so years that Mylan, Inc. has been selling -- and hiking the price -- of EpiPens, the drug company has been misclassifying the life-saving device and stiffing Medicaid out of full rebate payments, federal regulators told Ars. Under the Medicaid Drug Rebate Program, drug manufacturers, such as Mylan, can get their products covered by Medicaid if they agree to offer rebates to the government to offset costs. With a brand-name drug such as the EpiPen, which currently has no generic versions and has patent protection, Mylan was supposed to classify the drug as a "single source," or brand name drug. That would mean Mylan is required to offer Medicaid a rebate of 23.1 percent of the costs, plus an "inflation rebate" any time Mylan raises the price of the brand-name drug at a rate higher than inflation. Mylan has opted for such price increases -- a lot. Since Mylan bought the rights to EpiPen in 2007, it has raised the price on 15 separate occasions, bringing the current list price to $608 for a two-pack up from about $50 a pen in 2007. That's an increase of more than 500 percent, which easily beats inflation. But instead of classifying EpiPen as a "single source" drug, Mylan told regulators that it's a "non-innovator multiple source," or generic drug. Under that classification, Mylan is only required to offer a rebate of 13 percent and no inflation rebates. It's unclear how much money Mylan has skipped out on paying in total to state and federal governments. But according to the state health department of Minnesota, as reported by CNBC, the misclassification cost that state $4.3 million this year alone.
Make your own EpiPen clone, the EpiPencil.
The company claimed on official government forms for multiple years that the drug is a generic. Make it so. Job done. The government can do that.
Learn to love Alaska
ban drug ad's on tv!
Your math is off "$608 for a two pack" means $304 per pen. Compared to $50 per pen that is a 6-fold change equal to a 500% increase (500% + 100%).
As much fun as it is to use Mylan as a punching bag these days, there's a final point in the Ars article that leads me to think this is hardly in the bag for the Feds.
And if that's true - that Medicare was already applying the âoenon-innovator multiple sourceâ rebate schedule to the EpiPen back in 2007 - then that makes this case a lot murkier. The Feds would then have to make a case as to why the drug can and should be reclassified at the higher âoesingle sourceâ tier. It's clear that in practice the EpiPen is a single source device, but the conflict at the heart of this is one of bureaucracy and not medical practices; the Feds would need to justify both the higher rate now, and why they're not culpable for approving the lower rate in the first place.
Given how long that this is going on, I suspect that this isn't an easy case to prove, otherwise the Feds would have done it already. Instead it's probably being brought back up now to either apply additional pressure to Mylan, or to strike while the political iron is hot.
Patents are enforced to protect innovation in research, not to protect price gouging on a generic drug in a particular form factor. Capitalism in concept is about minimizing the lost value from unmet demand and wasted supply (not everything can be salvaged). Additions onto that are political and ideological not practical. In fact the actions of Mylan are opposed to capitalism as they are setting overly high prices on a captive market (Medicaid recipients) - the result of which is double damage as it prevents users who need it from getting it, and for those who still buy it it deprives them of the other needs done without to due to the purchase.
Or, it could be not malice, but mere stupidity.
It seems there's been a series of unfortunate events affecting Mylan's competitors:
Will anyone ever give Mylan’s ($MYL) blockbuster epinephrine injection, EpiPen, a run for its money?
That’s the question now that another potential competitor is out of the running. The FDA stiff-armed Adamis' ($ADMP) prefilled epinephrine syringe, asking for more data. Regulators want the San Diego-based company to expand a patient usability study and product stress testing studies included in the original application.
The way Evercore ISI analyst Umer Raffat sees it, Adamis’ product wouldn’t have been “a large competitor” for EpiPen, given the difference between its prefilled syringe and Mylan’s more convenient injection pen device. But “Adamis could have added to managed care pressures,” through its stated strategy of acting as a discounted product.
Instead, Mylan is home free--a status it must be getting used to, given the failures that have repeatedly befallen its competitors. Back in November, Sanofi's ($SNY) Auvi-Q hit a wall, when an injector fault triggered a hefty recall. Ultimately, the pharma giant yanked Auvi-Q from the market, and then bailed on its marketing partnership with developer PDL BioPharma ($PDLI), putting the med’s future up in the air. It was EpiPen's first real challenger in years.
More recently, the FDA handed generics giant Teva ($TEVA) a rejection for its generic version of EpiPen, flagging “certain major deficiencies” in its letter to the Israeli pharma. With serious issues to work through, Teva said earlier this year that it expects its product to be "significantly delayed"--meaning it doesn’t expect a rollout before 2017.
The FDA wouldn't have anything to do with the recall, and a request for more information isn't really a particularly effective use of corrupt power. Requests for more data happen all the time, so they're usually turned around pretty quickly. My money's on a perfect storm of chance events, and Mylan's taking the opportunity to capitalize on it.
You do not have a moral or legal right to do absolutely anything you want.
That CEO was basically given a degree because of her father's political ties. https://en.wikipedia.org/wiki/...
Only the State obtains its revenue by coercion. - Murray Rothbard
And if that's true - that Medicare was already applying the âoenon-innovator multiple sourceâ rebate schedule to the EpiPen back in 2007 - then that makes this case a lot murkier. The Feds would then have to make a case as to why the drug can and should be reclassified at the higher âoesingle sourceâ tier. It's clear that in practice the EpiPen is a single source device
Is it clear? There are other options out there (e.g. Adrenaclick), if you get your doctor to prescribe an "epinephrine autoinjector" instead of specifying "Epipen" by brand name. How different is that from other drugs? If you get a prescription for, say, Lipitor, can you fill that with a generic? Or can you only do that if you get a prescription for atorvastatin rather than the brand-name?
http://www.consumerreports.org...
rage, rage against the dying of the light
The fact that Mylan can charge these prices is government regulations and government-granted monopolies.
It's more dumb consumers and good marketing. There are cheaper alternatives like Adrenaclick available if you ask for a generic epinephrine auto-injector rather asking for Epipen by brand-name. See, e.g, Consumer Reports http://www.consumerreports.org...
rage, rage against the dying of the light
When you quintuple the price of an already expensive, widely purchased, life-saving device that is paid for largely by Medicaid and Medicare funds, you should expect that the government that is paying for your device will take notice and comb through the salient documentation to see if there is some possible legal problem with your price increase. Had the government not done so, we'd all be screaming that they were negligent in their financial oversight duties.
That list of problems with competitors fails to mention Impax's Adrenaclick, which has been FDA approved and sold in the US market freely since 2010; it's widely available (it's sold at Rite Aid, Walgreens, CVS, Walmart, Target, etc) and much cheaper than EpiPen.
rage, rage against the dying of the light
No it's not generic. Yes it should be. But the FDA approval rolls up the drug and the dispenser and the generic versions of the Epipen have not been approved. There are other makers that do provide epinephren auto injectors but they have their own systemic approvals. So while it should be a generic, the very fact that no generics can get approved means it's not generic. Mylan of course knows this. I'd be unsurprised if they were behind creating unneccessary specs just to fail the generics.
Some drink at the fountain of knowledge. Others just gargle.
If the pharmacist can't substitute the Adrenaclick for an EpiPen, then EpiPen isn't generic.
The real "Libtards" are the Libertarians!
Epinephrine is old and is or should be generic. The auto injector is a drug delivery system, and should I think be treated separately.
It could deliver any injectable drug no?
That there are no effective competitors to Mylans EpiPen reeks of impropriety.
This is capitalism at its finest. Every capitalist wants government mandates and protection for its monopoly. More money that way. When poor people get money from the government it is socialism, and when big business gets money from the government it is capitalism?
With the patent system as it is, where genetic codes and proteins can be patented, and where protection for drug profits is long and deep, there are situations like this that come up that allow unscrupulous companies to hike drug costs ridiculously like these clowns at Mylan.
Yes, many drug research efforts don't pan out. But Epinephrine has been out for a long time. Is anyone seriously going to try to tell me that $50 in 2007 became $304 in 2017? Even given the bogusly low inflation rates that are officially reported, that's insane.
This is profiteering. If the company didn't need to profiteer in 2007, why do they in 2017? No good reason methinks.
How about the definition of sole source is 'no equivalent product available at present'?
And how about you cap the rates at which drug costs can increase unless the providers can show material evidence that their costs have escalated so much?
I don't have $608 to shell out (US) for something I have to replace every 1-2 years. I'm carrying an old epi-pen that's probably not as efficacious now, but it's likely still better than no pen. I just can't afford the money to get a new one (let alone two, since protocol says you hit yourself with the first and about 30 minutes later the second if you haven't reached emergency medical care).
This should be a true generic. There should be equipment whose patents have an earlier mandatory expiry because they exist in the space called 'in the interest of public health'. I'm not suggesting these guys shouldn't have got their money back, but seems to me they are well beyond that point now.
On the other hand, this is exactly why the government or NGOs should be investing in some sorts of medical research in the public interest and making the product patents entirely open and available.
Epinephrine isn't patented. Its the injector. This seems like the kind of thing a Gates Foundation or even the Government could underwrite the development of (and may have already for Atropine and the like in prior days, if we call those syrettes an early version). Make the injector patent available and then it truly is generic because epinephrine is not patented.
The reality is that big Pharma has great lobbyists, political connections, and lawyers and the whole US patent system around biomedical issues defies any sort of common sense or rational thinking.
I hear rumours of alternatives, but I'm not sure they are available beyond the US borders. The Epipen fiasco and the price rise has hit many of us living in other countries too, but I'm not sure any alternatives exist where I live. I am going to look into that now though.
Patents should help protect innovation, but not form monopolies artificially (well, that may be other legislation that does that but that also needs looked at), should not have extensive duration, and should have clauses surrounding medical equipment that if the equipment price rises too quickly or if the provider becomes sole source, that the patent becomes licenseable by other companies for a very modest fee. At some point, the public interest has merit at least as great as profits for corporations.
-- Mal: "Well they tell you: never hit a man with a closed fist. But it is, on occasion, hilarious."
Now, that's exactly what I mean. With such political ties it's quite possible the FDA has been influenced also in maintaining a monopoly for Mylan.
"Trump!!", the new Godwin.
The UK NHS net prices for the 3 alternatives approved in the UK are:
Emerald (iMed) £26.94
EpiPen (Meda) £26.45
Jext (ALK-Abelló) £23.99
(aproximately US $30 to $35)
https://www.evidence.nhs.uk/formulary/bnf/current/3-respiratory-system/34-antihistamines-hyposensitisation-and-allergic-emergencies/343-allergic-emergencies/anaphylaxis/adrenalineepinephrine
Meanwhile, in the civilised world, our govenments negotiate huge bulk discounts, and prescrition drugs are subsidised to a fixed maximum.
The best part, we spend less per capita than the US on healthcare. Go figure.
Because Adreanaclick's product is not recognized as a AB rated generic, meaning that it can't be directly substituted by the pharmacist. The physician can WRITE for the particular product, but they have to actually do that.
For all of the Sturm Und Drang, I don't understand why the manufacturers of the other injectors and the mail order pharmacies don't run an advertising campaign to 'ask your doctor' to prescribe the specific product rather than 'Epi-Pen'.
Yes, Mylan is a slime ball company but there are ways around this.
Faster! Faster! Faster would be better!
2. Why is Medicare a captive market? Why don't they just buy one of the cheaper alternative ephinephrine autoinjectors (like Adrenaclick) instead of EpiPen?
Because Congress said they could not do that. That's the ONLY reason. Repealing that little bit of nonsense would go a long way to decreasing the cost of healthcare in the US. At the expense of the Big Pharma companies.
Funny that.
Faster! Faster! Faster would be better!
That's true. But, -according to the doctors I talk to- in most situations (unlike how it works with pretty much any other drug) a pharmacist may not substitute an Adrenaclick when presented with a prescription for an EpiPen. In order to be able to sell an Adrenaclick-brand autoinjector, the prescription needs to be written for either an "adrenaline auto-injector" or for an Adrenaclick.
Rule-makers' stated reasoning is something along the lines of "We don't want people who've trained on one auto-injector to get confused if they're presented with another!". But from what I hear, the two are functionally identical.
I would hope to hell that my doctors have an understanding of what's actually happening! That's what med school and years of experience are for.
I have some very bad news for you, then...
Since this is Slashdot, a car analogy may be best. If you take your precious high-performance sports car to a mechanic to find out why it's not getting the power that it should, he can look at the engine, perform tests and measurements, and tell you that your engine needs a fuel with a higher octane rating. He may not know precisely what an octane rating means chemically, or what chemical processes are taking place during combustion that affect the engine's performance, but he knows the cause of and solution for the symptoms presented.
Similarly, a physician does not usually need to know all of the biological processes that a particular drug affects. Knowledge of common interactions and side effects is necessary, but not the rare effects or anything easily treatable. Basically, if the treatment isn't going to be worse than the disease, they don't need to waste their time or memory thinking about the minimal chance of a mild adverse reaction.
This is not to disparage the medical professionals in any way, but only to clarify what the scope of their job requires. A programmer doesn't need to understand the particle physics that make semiconductors work, a carpenter doesn't need to know how to grow the wood he uses, and a doctor doesn't need to know every side effect for the 10,000 FDA-approved drugs he can prescribe today. Such knowledge just isn't necessary to be an expert in the field.
Making FDA decisions advisory, rather than mandatory would preserve its essential testing function...
...but completely undermine the incentive to actually perform that testing thoroughly and ethically. After an effective marketing campaign, there's no difference between "submitted for FDA approval" and "approved by the FDA", even if the former really means the manufacturer submitted only a brief description of the drug and it was rejected immediately. If, even without approval, the drug can still be marketed and promoted and prescribed, then it's more cost-effective for the manufacturer to run damage-control PR spin after a bad reaction than to actually ensure their products are safe in the first place.
And on the FDA site, I see databases of approvals and lists of rejections, but no details on rejections. We should have as much detail on rejections as we have for approvals. The reason we're not seeing that information is that...
...such information is rapidly out of date, and doesn't matter because doctors can't prescribe those drugs, anyway. The only purpose it serves is to terrorize the public with bad news about a drug that might eventually be considered safe, which in turn just makes it more difficult to convince patients that they should follow their prescribed treatment.
If you want to follow what's going on, I'd recommend some industry publications, which usually strike a nice balance between the technical details and the ultimate impact.
You do not have a moral or legal right to do absolutely anything you want.
Nope it depends on the state you live in and its Board of Pharmacy rules. In this state the written prescription must match the drug issued. Period. For example if a Dr writes a script for Diovan for high blood pressure. Most insurance will not pay for the brand name drug. The pharmacist will talk to the patient then call the Dr and ask for a new script to be issued for the generic Valsartan. If the Dr says the Brand must be used. The Dr will do all of the "medically necessary" paperwork for the insurance co. The pharmacy just waits for the insurance co. to OK the charges online. 95% of the pain and time working in a pharmacy is dealing with the insurance companies.
Good friend owns a pharmacy and at one time I had a pharmacy technician license.