Category: Pharma

Justifying EpiPen pricing, once again

published date
September 30th, 2016 by
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Back with more

I enjoyed Medical hackers create $30 DIY EpiPen in defiance of corporate greed over at inhabitat. The Four Thieves Vinegar collective cobbled together an “EpiPencil” from an auto injector for insulin, a hypodermic needle, and epinepherine. It’s a pretty cool trick but it proves nothing about EpiPen pricing nor does it help real patients.

Actually, it unwittingly reinforces the points I made in my very unpopular EpiPen may still be too cheap post, which is that the pricing of EpiPen has almost nothing to do with the cost of its parts.

Consider these caveats about the DIY EpiPencil from the inhabitat post:

However, it is worth mentioning that many experts have voiced concern about the EpiPencil and warned that it’s not advisable to try to create a piece of medical equipment at home – it can be difficult to ensure the correct dose is being administered, the epinephrine inside is delicate and might lose its effectiveness if stored this way, and of course, if someone were to create the device without paying close attention to hygiene, it could become contaminated. A miscalibration of the device could even cause the medicine to be injected into a vein, which can have dangerous side effects.

To recap, here’s what you’re paying for when you buy a real EpiPen:

  • The ability to send your kids to school, playdates, summer camp, hikes, and restaurants with reasonable confidence that they’ll survive an allergic reaction
  • An auto-injector that works. Remember, Twinject was rejected by the market for being clumsy, Auvi-Q was recalled because it could administer the wrong dose, and Teva’s autoinjector was rejected by FDA for “major deficiencies”
  • A device that many, many people know how to use: school nurses, babysitters, passers-by. That means someone is likely to be there to help you if you need it. Good luck with getting someone to learn how to use your EpiPencil in an emergency, even if somehow it worked as advertised

EpiPen’s maker, Mylan has done a lot of sleazy things, which I don’t defend, and as a result they may well deserve the opprobrium that is being directed at them. But I stand by my argument that EpiPen is not $2 of epinephrine and a syringe. Instead its a differentiated solution that provides plenty of value to users.

If someone can come up with something better and cheaper, please do!

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By healthcare business consultant David E. Williams, president of Health Business Group.

MedSentry: Adherence for complex drug regimens (podcast)

published date
September 16th, 2016 by

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Medication adherence is a tough challenge, especially for high-risk patients, whose complex drug regimens often feature more than a dozen pills. MedSentry is rolling out an end-to-end closed loop adherence system for this population. Although it’s not a large group, it is responsible for a disproportionate share of medical costs.

In this podcast interview, CEO Adam Wallen and I discuss the following:

    1. (0:11) Adherence is a big problem in healthcare. What does it mean? What’s the nature of the problem?
    2. (0:57) Are there multiple reasons for lack of adherence?
    3. (4:05) There are a number of adherence solutions in the market. How well do they work?
    4. (7:46) What is the MedSentry approach? How is it different?
    5. (11:57) What evidence is there that this approach is effective?
    6. (13:17) You have focused on the most complicated patients. Will that continue to be your niche as your commercialize?
    7. (14:55) Do you have a scale-up plan?

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By healthcare business consultant David E. Williams, president of Health Business Group.

EpiPen may still be too cheap

published date
August 26th, 2016 by
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Good stuff, cheap

Pick up a newspaper or surf the web and you’ll find story after story taking Mylan to task for EpiPen pricing practices. The list price of a 2-pack has soared from about $100 to $600 over the past decade. The price is deemed too high and the rate of increase is considered particularly unconscionable.

Let me offer a brief counterargument:

  • EpiPen is worth the price. A $300 pen regularly rescues children from anaphylactic shock that would otherwise be fatal, offering them the chance to live to 100 instead of dying at 10. (About 20% of patients need a second dose, which is why these devices are sold in 2-packs.) Meanwhile drug makers charge hundreds of thousands of dollars per year per hemophiliac, tens of thousands or more to give a cancer patient a shot at a couple or few more months of life, and thousands per year to modestly lower the chance of a heart attack. Within that context, and in absolute terms, EpiPen is indeed a bargain.
  • People are complaining that they pay hundreds of dollars per year –or more if they have multiple packs– for something they hope never to use. But they should acknowledge that they are actually using EpiPen even when they never dispense the drug. EpiPen is what lets them send their children on playdates and be comfortable with them away at school and summer camp, go out to restaurants, and take hikes in the woods.
  • EpiPen is worth a lot more than its current and former competitors. According to the Washington Post, Twinject left the market in 2012 and was considered clumsy and unappealing compared to EpiPen. Auvi-Q was recalled last year because it could administer the wrong dose. Teva’s autoinjector was rejected by FDA this year for “major deficiencies.” How many parents would be willing to trade down to save a few dollars on these? Anybody?
  • The failure of Adrenaclick to catch on despite a lower price, distribution through Walmart and a good review from Consumer Reports demonstrates that Mylan has done a lot with EpiPen over the past decade to earn its price premium and high market share. In particular, EpiPens are now close to ubiquitous in schools thanks to clever marketing, effective lobbying, and public health campaigns. School nurses know how to use them, babysitters know how, and so do siblings. When an emergency strikes and seconds count, the familiar tools are at hand, and people are ready to act. It doesn’t really feel like the moment to learn about Adrenaclick for the first time!
  • In effect, Mylan has created a public health support system around EpiPen. I’ll go ahead and make myself even more unpopular by saying that this system justifies the big price increases. When you buy EpiPen in 2016 you’re not just getting the product like you were in 2007, you’re benefiting from the whole system. Although the product itself hasn’t changed, EpiPen is more valuable now than it used to be, and Mylan has justifiably reaped the rewards.

EpiPen is far from perfect. For example, it needs to be stored within a tight temperature range and protected from light.  The pens have to be replaced annually. Other companies are working on EpiPen alternatives, and I’d like them to have a financial incentive to do so. A cheaper EpiPen could be nice, but I’d rather see something that’s better (easier to use, more effective, more stable), even if the price is higher. The current attacks on EpiPen are unfortunate because they discourage investment in these types of innovation.

Before you dismiss these arguments and call me an industry hack, I’ll point out that I have advocated for drug price regulation since 2006. But EpiPen is not the place for the government to intervene.

Image courtesy of Sira Anamwong at FreeDigitalPhotos.net

By healthcare business consultant David E. Williams, president of Health Business Group.

Drinking while grocery shopping. Is pot next?

published date
July 13th, 2016 by
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Where did my grocery cart disappear to?

Amazon.com seems to be unstoppable. It’s grabbed the lion’s share of the e-commerce market, turned other retailers into mere showrooms for shoppers who then purchase online, discarded list prices in favor of its own internal comparisons, and turned Prime Day into a new national shopping holiday. Little buttons around the house can be pressed to reorder staples, and voice commands to my Amazon Echo can summon goods to the home.

Supermarkets are now in Amazon’s sights. I’ve received come-ons lately for Amazon Fresh.

But instead of quaking in their boots, some supermarkets are taking a page from the casino playbook and offering inexpensive alcoholic beverages to customers. From the Wall Street Journal (Supermarkets Invite Shoppers to Drink While They Shop):

At nearly 350 Whole Foods locations nationwide, shoppers can carry open beverages out of the bar area and around the store as they shop around. Some stores have added cup holders to their shopping carts or placed racks around the store where shoppers can place empty stemless wine glasses. In some Texas locations, the $1 cans of beer rest in ice-filled buckets labeled “walkin’ around beer.” “When customers find out that they can sip and shop, a lot of times it’s a lightbulb moment,” Mr. Kopperud says.

Take that Jeff Bezos!

As just about everyone knows, alcohol lowers inhibitions and is more or less guaranteed to boost retail sales. Impulse purchase anyone?

But let’s fast forward this story just a bit. With the movement toward the legalization of marijuana for recreational purposes –which I oppose– it’s just a matter of time before these same stores start opening marijuana boutiques at their entrances, featuring a wide variety of tasty edibles. For Whole Foods they will likely be organic, gluten free and artisanal.

You can bet the munchies will contribute to a healthy boost to the average sale!

Come to think of it, these two ideas aren’t mutually exclusive. A walkin’ around beer and a marijuana edible sounds pretty darn attractive.

Ok, Amazon. What’s your reply?

Image courtesy of iosphere at FreeDigitalPhotos.net

By healthcare business consultant David E. Williams, president of Health Business Group.

Staying away from substance abuse on campus

published date
June 15th, 2016 by
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Safe at home

The opioid epidemic is truly devastating. Drug overdoses (mostly opioids) are a leading cause of death in the US, topping guns and car crashes. People don’t want to become addicted to drugs or die from overdoses, so why does it happen so often?

It often starts with a doctor writing a prescription for someone complaining of chronic or acute pain or following a surgical procedure. Little thought is given to the number of pills prescribed; extra pills are either consumed by the patient or left lying around in the medicine cabinet where they may be taken by family members or house guests who have developed a habit. When prescription pills run out and the cost of buying them on the black market is too high, users shift quickly to heroin, which is cheap, potent and readily available. The downward spiral can be steep.

Thankfully, the country is starting to get a grip on the opioid crisis. Health insurers are tightening up on opioid coverage, doctors are trying alternative therapies (like massage) or being more conservative in their prescribing. TV and newspaper stories are pointing out the perils.

Awareness is spreading, including to the younger generation. I’m really pleased to see that some colleges are offering “sober dorms” for students committed to a substance-free lifestyle. The idea is not brand new –a Rutgers program dates back to 1988—but it seems to be gaining traction as more schools try out the approach.

A number of schools offer housing for people in recovery, designed to prevent relapse. New Jersey has a new law requiring any college with more than one quarter of students living on campus to offer sober housing. Other schools are starting to offer sober dorms to students who are looking for a clean lifestyle, whether they are in recovery or not.

It’s also my impression that college administrators are doing more than they used to to enforce alcohol and drug laws, regardless of a dorm’s official designation.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

By healthcare business consultant David E. Williams, president of Health Business Group.