Tuesday, August 30, 2016

“Bypassing the brand system”? It’s just so damned opaque out there.

The only thing that’s got to be worse than being an adult who has to carry around an EpiPen in case of a food allergy emergency, is having a child who might have a food allergy emergency. Hard to imagine ever wanting to let your allergic kid out of your sight.

Most instances of death from anaphylaxis aren’t from food reactions. They’re from medicines. But there are plenty of ER-related visits made in the US each year due to an adverse reaction to some sort of food; 200,000 of them, in fact. The estimate is that, annually, there are only 200 deaths from food allergy. But that’s a statistical “only.” Not much comfort in a statistical only if one of those 200 deaths is your kid. (Data Source: Allergic Child)

I don’t recall ever hearing about severe food allergies when I was growing up. And it’s not just my imagination. Food allergies have increased over the past several decade. They haven’t yet put their finger on why, but more processed food, environmental changes, overuse of antibiotics are on most lists of suspects. (Round up the usual…)

That said, I have known folks who’ve had severe food reactions, in one case to shellfish, in another to anything with citric acid in it.

Many years ago, we were out to dinner with friends – one with an allergy to shellfish. The restaurant swore that there was nothing shell-fishy about the fish dish our friend ordered, but it turned out that it had been poached in some kind of shrimp-based broth. Fortunately, our friend’s wife was a nurse, and fortunately she had something – were there even EpiPen’s in the 1980’s – that could undo the reaction. But it could have been ugly.

And today, of course, I know folks whose kids have the dreaded peanut allergy.

All those peanut and other allergies translates into a big demand for EpiPens. And big demand does have a way of translating itself into higher prices, even if there are no shortages. And especially if there’s a third party footing all or part of the bill for those Epi kits.

I’m using the word EpiPen as the generic expression for a needle loaded with epinephrine. It’s the most well-known brand out there. The EpiPen people have cornered the school nurse’s office market. They do all that advertising. Doctors routinely prescribe it by name. And, overall, its owners have made it the Kleenex of the allergy response world. But the recent story is, of course, about the trademarked EpiPen® from Mylan. Which has been scooting prices up since they acquired the product in 2007. Back in that day, a two-pack retailed for $100; these days, it goes for a bit over $600. And since they have a shelf-life of 12-18 months, you can’t just buy a pack and forget it.

Anyway, since insurance has mostly covered the cost, regular, quite gouge-y price hikes were easy to sneak by the parents: they weren’t paying. But now with higher deductibles, more folks are noticing. So there’s been a big hue and outcry over Mylan’s behavior. Cue the pitchforks, especially when it came to light the Mylan CEO’s compensation had chugged right along, increasing from $2.4 million to $19 million since 2007. (She wasn’t the CEO in 2007, but that’s beside the point, given all those pitchforks…)

Mylan’s response to their recent bad press was to rush out with a generic version that will be identical to EpiPen®, brand identify and packaging aside.

We can expect the usual reaction from those being prescribed the generic. Many will welcome it, as it’s the same only cheaper and less glitzily packaged. Others will accept no substitutes. (I read somewhere, years ago, that the little purple pill called Nexium did such a bang-up job advertising, that many patients balked at using a generic version, believing that only Nexium had the purpleness that made it effective.)

Here’s how Heather Bresch, Mylan’s CEO, framed the announcement of the plain brown wrapper version of her company’s money maker:

Because of the complexity and opaqueness of today’s branded pharmaceutical supply chain, and the increased shifting of costs to patients as a result of high deductible health plans, we determined that bypassing the brand system in this case and offering an additional alternative was the best option. (Source: Mylan)

While this was in the press release, under “Heather Bresch commented”, we do know that she never actually said this. Nobody in the history of human speech would ever make this comment. Even by press release gobbledygook standards, this one is gobbledygook-y. Pretty darned opaque, if you ask me.

Having recently written a white paper for one of my clients on how their product makes the pharmaceutical supply chain a better place, I do understand that it’s complex. But is it really all that opaque? In announcing a plan to bypass the brand system, isn’t Myllan really just saying that there will be fewer nodes along the chain with their hands out, grabbing their piece?

And, of course, there’s opaque and then there’s opaque.

In bypassing the brand system, Mylan is “able” to cut the price of the EpiPen® in half. But, given rebates, they stand to make pretty much the same profit per pack. So it really won’t matter, one way or the other, whether consumers accept the generic or insist on the “real” version. You know. The Kleenex, the Nexium one that does all the advertising, and gives all those samples out to doctors.

And we wonder why prescription drugs in the US cost so much.

I’m all for making a profit. I’m all for drug companies investing in R&D. But this whole situation seems ridiculous.

Maybe all the light being shed on Mylan will make the opaqueness of today’s branded pharmaceutical supply chain a bit more transparent. Would that it can do the same for opaque press releases…

1 comment:

Rick T. said...

Drug companies can get away with big price increases only when they have no competition. The FDA makes it extremely hard and outrageously expensive to get any new drug approved, even an essentially identical generic version of something it has already approved. The FDA is the bottleneck that puts companies in a position where they can name their price because no one else is allowed to compete.

In the name of preventing another Thalidomide, the FDA creates hundreds of EpiPens, and probably causes many thousands of deaths each year from people unable to afford medication that could save them