According to news reports, despite stable manufacturing costs, Mylan Pharmaceuticals has increased the price for a two-pack of EpiPens from $100 in 2008 to $500 today, with some reports of consumers paying $600 or more; Not only is this alarming price increase unjustified, it puts life-saving treatment out of reach to the consumers who need it most
In a letter to the Federal Trade Commission (FTC), Klobuchar urges an investigation into whether Mylan Pharmaceuticals has engaged in activities, such as using incentives or exclusionary contracts with insurers, distributors, or pharmacies, to deny an alternative product access to the market; Klobuchar has also called on the Senate Judiciary Committee to hold a hearing to investigate the enormous increase in the price of EpiPens
WASHINGTON, DC – U.S. Senator Amy Klobuchar, the Ranking Member of the Antitrust Subcommittee of the Senate Judiciary Committee, has called for a Federal Trade Commission (FTC) investigation of Mylan Pharmaceuticals for possible antitrust violations in light of the dramatic price increase of EpiPen packs. According to news reports, despite stable manufacturing costs, Mylan Pharmaceuticals has increased the price for a two-pack of Epipens from $100 in 2008 to $500 today, with some reports of consumers paying $600 or more. Not only is this alarming price increase unjustified, it put life-saving treatment out of reach to the consumers who need it most. In a letter to the FTC, Klobuchar urges an investigation into whether Mylan Pharmaceuticals has engaged in activities, such as using incentives or exclusionary contracts with insurers, distributors, or pharmacies, to deny an alternative product access to the market. Klobuchar has also called on the Senate Judiciary Committee to hold a hearing to investigate the enormous increase in the price of EpiPens.
“I write to request the Federal Trade Commission (FTC) investigate whether Mylan Pharmaceuticals has violated the antitrust laws regarding the sale of its epinephrine auto-injector, EpiPen. Many Americans, including my own daughter, rely on this life-saving product to treat severe allergic reactions,” Klobuchar wrote. “Although the antitrust laws do not prohibit price gouging, regardless of how unseemly it may be, they do prohibit the use of unreasonable restraints of trade to facilitate or protect a price increase. The FTC should investigate whether Mylan Pharmaceuticals engaged in activity, such as using incentives or exclusionary contracts with insurers, distributors, or pharmacies, to deny an alternative product access to the market. While the Senate Judiciary committee should explore both the potential consumer and antitrust violations that could be involved here, I ask that within 90 days you provide any guidance or policy proposals to make these markets more competitive and eliminate the ability of some drug manufacturers to reap windfall profits at the expense of consumers who need access to life-saving products.”
Klobuchar has championed efforts to address the high cost of prescription drugs, authoring multiple pieces of legislation that would protect American consumers. She has introduced the Safe and Affordable Drugs from Canada Act that would require the Food and Drug Administration to establish a personal importation program that would allow individuals to import a 90-day supply of prescription drugs from an approved Canadian pharmacy. The price of EpiPen is significantly lower in Canada. She has also introduced the Medicare Prescription Drug Price Negotiation Act of 2015, that would empower Medicare to negotiate for the best possible price of prescription medication. Current law only allows for bargaining by pharmaceutical companies and bans Medicare from doing so. The Preserve Access to Affordable Generics Act would expand consumers’ access to the cost-saving generic drugs they need and increase competition between drug manufacturers and choices for consumers by helping to put an end to “pay for delay” deals—the practice of brand-name drug manufacturers using anti-competitive pay-off agreements to keep more affordable generic equivalents off the market. She also joined with Senators Chuck Grassley (R-IA), Patrick Leahy (D-VT), and Mike Lee (R-UT) to introduce the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act to deter pharmaceutical companies from blocking cheaper generic alternatives from entering the marketplace.
The full text of Klobuchar’s letter is below.
Dear Chairwoman Ramirez:
I write to request the Federal Trade Commission (FTC) investigate whether Mylan Pharmaceuticals has violated the antitrust laws regarding the sale of its epinephrine auto-injector, EpiPen. Many Americans, including my own daughter, rely on this life-saving product to treat severe allergic reactions. Since purchasing the product in 2007, Mylan has dramatically increased the price of EpiPen. According to news reports, the price for a two-pack of EpiPen has increased from $100 in 2008 to $500 today, with some reports of consumers paying $600 or more. Although Mylan offers a coupon to cover the co-pay, this provides little aid to those with high-deductible health plans or those without insurance.
There does not appear to be any justification for the continual price increases of EpiPen. Manufacturing costs for the product have been stable and Mylan does not need to recover the product’s research and development costs because the product was on the market years before Mylan acquired it in 2007.
Not only is this alarming price increase unjustified, it puts life-saving treatment out of reach to the consumers who need it most. EpiPen expires after a year, meaning consumers are required to buy new EpiPens annually. However, due to the increasing cost, some people are being forced to carry expired doses of EpiPen, hoping the product will work even past the expiration date. Others are considering using less expensive, traditional syringes, which require more training and are potentially more dangerous.
Unfortunately, the story of EpiPen is not unique. Time and again, we see reports of a pharmaceutical company buying a prescription drug product and then raising the price dramatically. For example, Turing Pharmaceuticals, after purchasing the infectious disease drug Daraprim, increased its price from $13.50 to $750 a pill. Similarly, after acquiring two heart drugs, Nitropress and Isuprel, Valeant Pharmaceuticals immediately increased their prices by 525 and 212 percent, respectively.
Although the antitrust laws do not prohibit price gouging, regardless of how unseemly it may be, they do prohibit the use of unreasonable restraints of trade to facilitate or protect a price increase. The FTC should investigate whether Mylan Pharmaceuticals engaged in activity, such as using incentives or exclusionary contracts with insurers, distributors, or pharmacies, to deny an alternative product access to the market.
For example, although some competitors have withdrawn their product from the market or failed to obtain regulatory approval, one alternative auto-injector epinephrine product, Adrenaclick, remains available. According to public sources, it is much less expensive than EpiPen, but it has only minimal sales. Consumers report that many insurers do not cover the less expensive alternative. There may be benign reasons for EpiPen’s market success, but the FTC should consider other potential explanations. When a company imposes enormous costs on American consumers on such an important product, the FTC must ensure that no illegal actions have occurred.
While the Senate Judiciary Committee should explore both the potential consumer and antitrust violations that could be involved here, I ask that within 90 days you provide any guidance or policy proposals to make these markets more competitive and eliminate the ability of some drug manufacturers to reap windfall profits at the expense of consumers who need access to life-saving products.
Thank you for your attention to this important matter. I look forward to your response and to continue working together to protect and promote competition in the pharmaceutical markets to make prescription drugs affordable for all Americans.
Sincerely,
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