Mylan CEO highlights EpiPen® access improvement efforts before House committee

Mylan CEO Heather Bresch attempted to deflect the conversation away from the EpiPen® price hike before the House Committee on Oversight and Government Reform by emphasizing Mylan’s efforts to improve access to the device. Dr. Douglas Throckmorton, Deputy Director for Regulatory Programs for the FDA’s Center for Drug Evaluation and Research, also testified about the FDA’s efforts to support the development of new auto-injector products to compete with the EpiPen.

Price hike

When Mylan first purchased the EpiPen from Merck in 2007, the list price for the device was about $57. Today, a 2-Pak is listed at $608. These numbers gained national attention, resulting in outcry from consumers, government scrutiny, and falling stock prices. In response, Mylan doubled eligibility for the patient assistance program allowing consumers to use a savings card when purchasing the EpiPen. Consumers and the press found this action insufficient, especially considering that those without insurance and patients enrolled in federal health care programs are not eligible to use the savings card (see Mylan attempts to mitigate EpiPen® cost hike controversy, Health Law Daily, August 25, 2016).

Testimony

Throckmorton noted that four epinephrine auto-injectors have been granted FDA approval, but only two are on the market. Amedra’s brand name Adrenaclick® is not currently marketed, but the company is marketing its own generic version. Its Twinject® product was discontinued. Kaleo purchased Auvi-Q® from Sanofi after it was recalled and has not yet returned the product to market. According to Throckmorton’s testimony, the FDA is willing to provide one-on-one guidance for products like an auto-injector that combines drug and device components and is working to assist manufacturers in bringing generic drugs to market.

Bresch believes that the issue of access to the EpiPen is equally critical as the pricing aspect. She testified that in 2007, fewer than one million out of the 43 million consumers at risk for anaphylaxis had access to an auto-injector. Since then, about 80 percent more patients have been reached and 85 percent who obtain the EpiPen pay less than $100 for the 2-Pak. Mylan has also provided 700,000 free EpiPens to schools.

Turning to price, she clarified that Mylan does not receive $600 in profits per 2-Pak sold. Although the wholesale acquisition cost (WAC) is $608, Mylan receives $274 after rebates and fees. After subtracting cost of goods and costs, Mylan’s profit is about $100 per 2-Pak. Bresch outlined four steps Mylan has taken to combat the pricing issue:

  • announcing a generic EpiPen to be priced at $300;
  • providing a direct ship option for the generic;
  • increasing the savings card program benefit to $300, from $100; and
  • doubling the income eligibility limit for receiving free pens.

Medicare Part D costs

The Kaiser Family Foundation (KFF) found that between 2007 and 2014, Part D spending on EpiPens increased by 1151 percent. Although the total number of EpiPen users grew from about 80,000 to 211,500 during that time frame (164 percent growth), the average total spending per prescription went from $71 to $344 (383 percent increase). Part D spent $7 million on EpiPens in 2007 and almost $88 million in 2014.

Out-of-pocket spending increased dramatically as well, even though Part D covers some of enrollees’ drug costs. The increase in users and price resulted in a jump in out-of-pocket spending from $1.6 million to $8.5 million. The report noted that the price of the EpiPen has increased by 74 percent since 2014, but Part D spending information for this time period is not yet available.

Is there a better way than the ACA? Hearing asks experts

Lawmakers considered health care reforms to improve pre-existing condition protections, lower patient costs, and encourage plan innovation at a hearing held by the House Committee on Energy and Commerce, Subcommittee on Health. The hearing included testimony from health reform experts on the ways the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) has aided or hindered the advancement of health care and experts offered recommendations for how the health reform law can be advanced or altered to improve the industry.

ACA improvements

Sabrina Corlette, a research professor and project director at Georgetown University, testified that while the ACA has led to significant improvements in access to care and health insurance coverage, now, six years beyond the law’s enactment, lawmakers have new opportunities to further the ACA’s reach and strengthen its benefits. Corlette acknowledged that the ACA is not a perfect law and suggested that lawmakers improve upon it by: (1) providing incentives for the remaining non-expansion states to expand Medicaid; (2) fix the glitch that prevents working families from obtaining marketplace credits; (3) improve affordability because, for many low- and moderate-income individuals, insurance costs remain out of reach; (4) support outreach and enrollment efforts; and (5) improve the marketplace shopping experience.

Trends

More dramatic steps need to be taken to improve consumer choice and shrink rising costs, according to the testimony of Scott Gottlieb, resident Fellow at the American Enterprise Institute. Gottlieb pointed to alarming trends in the health insurance market, like narrowing provider network, shrinking drug formularies, increases in mandated costs for insurers, more limited tools to manage actuarial risk, provider consolidation, inefficient care, and limited economic accessibility of coverage purchased outside of employer relationships.

Improvements

Many of these problems could be alleviated, according to Gottlieb, if regulatory standards were better designed to encourage innovative plan designs. He warned that the marketplace’s current tier and formula restrictions are too narrow to allow for bottom up approaches to plan design that could lead to novel and cost saving coverage. Gottlieb noted that the tiered approach, while helpful from a consumer plan selection point of view, has served to hinder advancement of plan design by forcing insurers into narrow design corridors. He also suggested that CMS move away from mandates and towards incentives as a means to get people into the insurance market.

Flawed design

The ACA is also responsible for dramatic increases in the cost of individually-purchased health care, according to the testimony of Avik Roy, Senior Fellow at the Manhattan Institute. Roy testified that while the ACA reduced the number of Americans who are uninsured, it has fallen short of coverage projections and exacerbated other problems. To improve upon what he called the ACA’s “flawed design,” Roy recommended a transition away from ACA models towards a non-group health insurance market which would: (1) give patients control of health care dollars; (2) make premiums more affordable for young and healthy enrollees; (3) enable voluntary participation; (4) provide affordable premiums and guaranteed coverage for individuals with pre-existing conditions; and (5) streamline tax credits.

Hearing addresses physicians’ MACRA preparations

Lawmakers and physician leaders discussed the steps physicians are taking to prepare for Medicare changes under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (P.L. 114-10) at an April 19, 2016, hearing held by the House Committee on Energy and Commerce, Subcommittee on Health. The hearing addressed the promise of the new law, the necessary preparations physicians must take to benefit from the legislation, and points of caution that should be areas of focus for CMS as the agency works on regulations the agency is expected to release this spring.

Benefits

The physician leaders who testified at the hearing celebrated the patient oriented nature of the legislation. They also applauded the way MACRA seeks to move Medicare forward through the elimination of the sustainable growth rate (SGR), the streamlining of programs through the Merit-Based Incentive Payment System (MIPS), and the reliance on alternative payment models (APMs). Barbara McAneny, testifying on behalf of the American Medical Association (AMA), noted that in addition to resetting and improving quality reporting, “MIPS has the ability to streamline measures, reduce reporting burden, create flexibility to report on clinically relevant measures, encourage participation, and overall improve care.”

Incremental

Despite the benefits of the transitions under MACRA, Jeffrey Bailet, President of the Aurora Health Care Medical Group, testified as to the need for regulators “to proceed cautiously” during the transition. Bailet warned that as CMS takes on the dramatic transition from fee-for-service towards MIPS and APMs, the agency needs to be aware there is a learning curve for many providers, which comes alongside new financial risk. As a result, Bailet recommended that the MIPs and APM regulations “providing an incremental approach that includes flexibility and rational exposure to financial risk.”

Burnout

Robert McLean, testifying on behalf of the American College of Physicians, raised concerns regarding physician burnout and relayed anecdotes of physician complaints regarding other laws and regulations like those related to electronic health records, prior-authorizations, and payment penalties. While McLean acknowledged the importance of the goals of the “triple-aim”—(1) improvement of the patient experience; (2) improving health populations; and (3) reducing per capita costs—he testified that the triple-aim should become the quadruple-aim with a fourth goal related to physician burnout. Specifically, he recommended that stakeholders focus on a fourth goal of “improving the work life of health care clinicians and their staff.” To achieve the goal, McLean recommended less burdensome reporting and the development of pathways for patient-centered medical homes.

Education

To prepare primary care physicians, Robert Wergin, Board Chair of the American Academy of Family Physicians (AAFP), testified that the AAFP has developed a comprehensive, multi-year member education, and communications effort called “MACRA Ready.” The effort includes regularly updated educational resources, tools, resources, videos, and assessments. Although Wergin acknowledged that without a Proposed rule it is difficult to identify what exactly CMS will do under MACRA, he noted that the AAFP would like CMS to address flaws that undervalue primary care, ensure the existence of APMs for primary care physicians, avoid over complex regulation, and grant greater flexibility in the initial MACRA performance year because January 1, 2017, is an unrealistic date to begin measuring performance because the regulations are not yet finalized.