Socialize the EpiPen

By Adam Gaffney, Jacobin

03 September 16

The EpiPen mess shows that we need drugs that function as real social goods, not rent-producing commodities.

The ongoing EpiPen debacle has served one useful purpose: it has plainly revealed the uninhibited avarice — and general dysfunction — at the core of the American pharmaceutical system.

The saga of the EpiPen — and the chicanery of Mylan Pharmaceuticals, its merchant but not its maker — exemplifies a slew of troubling developments that have been unfolding throughout the pharmaceutical universe in recent years. Most prominently, of course, there is the appalling price-gouging: Mylan bought the EpiPen in 2007, at which point a pair of them went for about $100; then, as the New York Times reported, it proceeded to jack the price up, at an accelerating pace, to over $600 currently.

This massive and entirely arbitrary sixfold price increase produced a windfall for the company, and made its CEO Heather Bresch colossally rich in the process. Her annual salary skyrocketed from around $2.5 million in 2007, as NBC News reported, to an absurd $18.9 million by 2015.

What did Mylan do to rake in such kingly sums? It’s not quite clear. Mylan didn’t invent the drug or the autoinjector technology that is the EpiPen’s raison d’etre (this device essentially allows individuals to rapidly and easily inject a precise, preloaded dose of epinephrine into the muscle of themselves, or others, when in the throes of a suspected anaphylactic reaction).

Epinephrine, as many have noted, is today cheap as dirt and has been around for more than a century, while the essentials of the >autoinjector date back to the 1970s. Indeed, as an article at Timeline describes, the EpiPen actually “owes its existence to public initiative.”

The Pentagon sponsored the development of an autoinjector that could rapidly deliver a nerve gas antidote in case of a chemical weapons attack. This is no aberration: the EpiPen is one of many medical advances whose early development was publicly funded, only to later serve as a source of enormous private profit.

But furthermore, Mylan doesn’t even make the EpiPen: it outsources that to Pfizer’s Meridian Medical Technologies, which manufactures a whole lineup of autoinjector products (including, incidentally, injectors for antidotes for nerve gas among other nasty poisons).

In short: Mylan and its CEO have gotten filthy rich off of a drug that they not only didn’t invent, but don’t so much as glue together.

The company’s real gift lies not in innovation or manufacturing, but in marketing and politicking. As an article in Bloomberg describes, Mylan successfully fought for federal legislation that encouraged schools to keep a supply of EpiPens in stock, reached an agreement to have its products available at Disney World and on Disney cruises, and pushed to have EpiPens available in various public places, like restaurants and hotels, across the country. And in 2014 Mylan devoted a mammoth $35.2 million towards direct-to-consumer EpiPen television advertisements (the company, Bloomberg notes, disputes this number).

Mylan has also followed another tried-and-true Big Pharma strategy: it hired a celebrity spokesperson to sell product via the promotion of “disease awareness.” Sex in the City’s Sarah Jessica Parker was on Mylan’s payroll for this very purpose (she recently broke her ties with the company).

Other companies have taken a similar path: Shire Pharmaceuticals paid Monica Seles to elevate awareness of a brand new diagnosis, binge eating disorder, and also pays the Maroon 5 singer Adam Levine to promote awareness of adult ADHD (naturally, Shire sells a brand-name amphetamine for both of these conditions).

Still, marketing shenanigans aside, the reality is that anaphylaxis is truly a life-threatening condition, that rapidly injected epinephrine can be lifesaving, and that many households which need to have a ready supply of autoinjectors are being financially squeezed — whether because of high deductibles or uninsurance — for corporate gain. So if we do in fact need a large supply of widely available, inexpensive epinephrine autoinjectors, what should be done?

Drugs for All

Some hope that public outrage and shaming will succeed in convincing the company to lower its price. So far, that hasn’t worked, though that could change. Mylan did increase its financial assistance program to cover more of the copayments for some users (albeit without lowering the price).

More recently, it also announced that, rather oddly, it would begin offering a generic version of the EpiPen to compete with its own branded drug, at half price, and sold directly to consumers. However, as STAT’s Damian Garde reported, this “savvy business move” could conceivably increase the company’s profits (for instance, by bypassing middlemen). In any event, $300 for a pair of pens is still an incredible windfall, and an untenable price for many.

Proposals from many other commentators have revolved, in contrast, around ways to bring new products into the epinephrine marketplace, so as to lower the price of the pens through competition.

This sounds about right, but here’s the rub: apart from the problem of cost, it’s not clear that we actually need new types of epinephrine autoinjectors. The existing one works well already. Money spent developing, testing, approving, marketing, and advertising new proprietary epinephrine autoinjectors is mostly a waste.

Indeed, the development and marketing of such so-called “me-too” drugs is a major problem in the American pharmaceutical system, one which diverts research monies away from the development of truly innovative drugs for untreatable or inadequately treated diseases towards endless reiterations of existing therapies.

Which brings us to the next question: how about more competition from generics? Indeed, why isn’t there a generic EpiPen already? The situation here is complex and a bit murky, but important.

A single generic company — Teva Pharmaceuticals — was actually poised to have a generic version of the EpiPen on the market by now. Teva first submitted its generic application to the FDA seven years ago, in 2009. This provoked a patent infringement lawsuit (a revised autoinjector device, not epinephrine itself, is what is still patented). This is far from unique: this sort of litigation is one tactic among many that Big Pharma employs to delay the entry of generic competition.

In any event, according to Bloomberg, the litigation dragged on until 2012, when Teva won the right — assuming that it got FDA approval — to market a generic EpiPen beginning in mid 2015, and maybe earlier under unspecified conditions (the details of the confidential settlement remain unclear). However, in March, the FDA rejected Teva’s generic application, delaying the introduction of the generic EpiPen, as Bloomberg reported.

It’s not clear why the FDA rejected its application, although according to a new study described by STAT’s Ed Silverman, a “Citizen Petition” filed with the FDA by Mylan — in which it argued (not surprisingly) that the agency should reject Teva’s generic EpiPen application — potentially played a shady role in the FDA’s decision. Mylan’s argument in the Citizen Petition was essentially that minor differences in the way the devices were designed and used meant that they were not necessarily interchangeable in “an emergency situation . . . without additional physician interaction or training,” and were therefore unsafe.

Mylan’s argument here is self-serving and possibly entirely specious, but it contains a kernel of rationality. After all, there is a reasonable argument to be made that having a single epinephrine autoinjector is safer than having a multitude of competing products, all basically doing the same thing, but with various minor or major design differences.

Epinephrine is injected in anaphylactic emergencies —moments often characterized by pending or actual asphyxiation and the understanding panic that may accompany it. Familiarity is key, and a single, standard, universal device has some legitimate potential public health merits.

However, if we accept Mylan’s reasoning for an EpiPen monopoly — as health policy writer Yevgeniy Feyman noted on Twitter — than we’re all but forced to one course: “compulsory licensing.”

My proposed solution to the EpiPen mess follows in this line of thought. Essentially: bust the damn patent. Or, at least, the US government should threaten to bust the patent, and we should then watch the price fall faster than you can jab yourself in the thigh with an adrenaline-filled pen.

There is precedent here. So-called “compulsory licensing” of drugs is a reasonable course nations take when significant public health issues are at stake. Indeed, the US Department of Health and Human Services — during the administration of George W. Bush, no less — threatened, as the Wall Street Journal reported in 2001, to bust Bayer’s patent on the antibiotic ciprofloxacin if it didn’t bring down its price (the government was stockpiling the drug in case of an anthrax attack). Bayer quickly obliged, the Journal noted, by slashing the price by almost 50 percent a pill.

Other examples abound: in a 2009 article in the Journal of Law, Medicine & Ethics, legal scholar Jerome Reichman described a proliferation of “compulsory licenses on pharmaceuticals — or public threats thereof — in both the southern and northern hemisphere” that led to price reductions for drugs in many countries. As he describes, these types of compulsory licenses even enjoy some theoretical protection under international property rights law.

To be fair, it may be that the legal complexities and challenges — whether domestic or international — of this course would make the compulsory licensing of epinephrine autoinjectors practically difficult, and perhaps impossible without legislation.

How this would play out — and the form it would take — is also not entirely clear. Moreover, as some note, patent protection is only one factor in Mylan’s dominance in the epinephrine market (indeed, there is already one other non-generic competitor).

Still, a government threat to effectively break the patent — whether by purchasing EpiPens from abroad or by issuing compulsory licenses to willing and able domestic manufacturers — could help to at least initiate a much-needed reassertion of the interest of the public over that of Big Pharma.

One final counterargument should be addressed: it could be argued that the patent is irrelevant, and that other generic manufacturers are apparently not particularly interested in entering the epinephrine market. This seems improbable, but could be made even more improbable if compulsory licensing was coupled with a large government bid for the purchase of the devices, for the purpose of directly supplying the schools and other public places that non-industry-funded public health experts believe is justified by the evidence. Conceptually — and even better — the government could also provide them to public health care providers and insurers.

Simply, if epinephrine autoinjectors are to be stockpiled in public places like schools throughout the nation, and if they are optimally identical, then they constitute a significant public health concern that cannot be left to the caprice of one or two oligopolistic firms.

Still, even this would be partial and inadequate: we also need to consider more systemic-type changes that extend beyond the media outrage cycles that intermittently emerge around individual drugs. Such fixes can be construed on two levels.

First, single payer health care reform would allow a single purchaser — the government — to directly haggle with drug manufacturers over drug prices. This would predictably bring US drug prices in line with those of other high-income countries, which pay substantially less than we do for medications (including for EpiPens).

Second, we need a comprehensive reform in the way we produce new drugs —inclusive of a public path for drug development and clinical trials that would produce new medications that would remain forever in the public domain. Drugs, that is to say, that would function as real social goods, not rent-producing commodities.

This sort of twofold reform could help usher in a new wave of more innovative —and more affordable — therapies, for the good health of us all.