Showing posts with label EpiPen. Show all posts
Showing posts with label EpiPen. Show all posts

Saturday, January 30, 2016

Asthmatics Held Hostage





I never thought in my wildest dreams that I would end up paying $275 for 0.3 mg of epinephrine.  My allergist told me that the range of the patients he sees is about $150-200.  My allergic friends tell me that in some cases they are paying as low as $80 depending on insurance coverage.  Most Americans are on high-deductible insurance plans like I am.  That means that for the first half of the year or longer - expect to pay the full retail price for medications.  Despite the fact that the price of the autoinjectors has skyrocketed in the past few years, they still contain just a few dollars worth of drug in a fancy injector.  Most people who have anaphylaxis experience occasional reactions when exposed to a certain allergen and do not need to use the pens on a routine basis.  They are warned that the pens expire at a certain date and need to be replaced.  A 2014 paper (1) that looked at an emergency department intervention for anaphylaxis commented on the costs of the auto-injector weighed against both inadequate treatment of anaphylaxis and the potential adverse consequences of administering the wrong dose.  They looked at Average Wholesale Price (AWP) of the autoinjector containing 0.3 mg and 0.15 mg doses of epinephrine ($75.00) and a 1 mg vial of 1:1000 epinephrine ($3.00).  Obviously if you are having an anaphylactic reaction it is useful to have a viable and easily usable form handy to address the problem.  On the other hand what is it about packaging that results higher costs?  Until recently there has been no competition for epinephrine auto-injectors.

The other factor driving the cost is that manufacturers and insurance companies know that patients who need this device are over a barrel.  They need the medication and will pay for it.  If a steep copay or paying retail price due to a deductible is required - many will pay that price rather than risk death.  I said many because the high price of the auto-injector is preventing some patients from refilling their prescriptions.  A letter (2) found that only 40% of adults and teens and 60% of children refilled the auto-injectors at the appropriate time and suggested that cost may have been a factor.  In many ways this could be viewed as an unintended consequence of high deductible insurance and contrary to the pop economic theory that consumers will be more price sensitive when they are spending their own money.  That can only happen when there are price competitive products.

For that reason I have included the Advair Diskus Inhaler.  I have suggested in previous posts that asthma and most severe mental illnesses have a lot in common because of complicated genetics, diverse mechanisms, phenotypic heterogeneity, poor treatment response and chronicity.  Contrary to what most of us were taught in medical school most asthmatics are symptomatic.  Although many of the precipitants of worsening asthma control are known - there seems to be very little interest in doing much about it.  From a marketing standpoint that creates a lot of demand for products to address those issues.  Although there is no clear evidence that one product is superior to others,  Advair Diskus Inhalers have demanded a large market share.  During some recent years they have sold over $13 billion of product in a market where one billion in sales is considered a blockbuster drug.  In 2013, it was the third highest in pharmaceutical sales.  The inhaler pictured at the top of this post cost me $345.  The critical deductible period of my health insurance plan is the reason why I am paying that much cash to take a medication that I take all year long.  Once again it is all in the packaging.  The patent on the fluticasone/salmeterol drug combination ran out in 2010.  The unique disk delivery system remains on patent until mid-2016.  There is still debate about what will constitute a generic substitute.

I think that there are valuable lessons in the marketing and sales of both Advair Diskus and EpiPen that are relevant now that pharmaceutical sales are spiking again.  There is also a valuable lesson about the "market forces" argument for high-deductible insurance.  Packaging alone in these two cases is enough to capture all of that $3000-6000 deductible from anyone who wants to keep taking a prescribed medication.  It also illustrates that rather than being an intermediary for cost effectiveness, insurance companies are much more likely to step aside, and let their customers absorb the  full retail cost of a medication rather than negotiating better prices with manufacturers.  It may take a while for an American public that has been accustomed to Big Pharma and physician conspiracy theories to realize what is really going on.

There is also an associated lack of data on exactly how much people are paying.  I have been describing health care costs as a hidden tax (even before the Obamacare penalty) because it easily exceeds property taxes for most people and is their second highest expenditure after income taxes.  A recent paper by the Urban Institute backs that opinion up with data.  The authors looked at health care costs based on income as a percentage of the Federal Poverty Level (single person = $11,770, 2 person family = $15,930).   The authors looked at a simulation of various income brackets for people enrolled in Affordable Care Act (ACA) compliant non-group plans.  They found that people in both the median and 90th percentile in each bracket pay substantial amounts for premiums and out-of-pocket expenses as a percentage of their income.  As an example, a couple earning 300-400% of the FPL earns about $48,000-$64,000 per year.  At the median income they would pay 14.5% of their income for health care premiums and out-of-pocket expenses.  At the 90th percentile, they would pay 22.2% of their income.   According to this simulation, only those at < 200% of the FPL or > 500% of the FPL would pay less than 10% of their income toward health care expenses.  The range for all two person families was 10.8-13.4% for incomes of $32,000 to $80,000 per year.   That number easily exceeds the average nation wide property tax figure of $2,800 per year.

The title of this post was intentionally dramatic.  I hoped to illustrate just how incredibly expensive health care costs are here in the United States.  I encourage rethinking some of the issues related to this cost.  In this post, it is apparent that business leverage still carries the day.  The pharmaceutical and insurance/managed care businesses can still make as much money as they want to.  It is possible by the pharmaceutical funding and insurance rules that exist out there and of course they are all approved or written by business friendly politicians.  The second shocking fact are the estimates of health care cost for middle income Americans as 10.8-13.4% of their income.  That easily exceeds property tax costs and for most Americans it also exceeds their state income tax bill.

That leads me to conclude that health care costs are really the second largest tax on all Americans, exceeded only by federal taxes.  That fact should stop anyone in their tracks and lead them to think about all of the free market rhetoric and the relationship between this industry and Congress.  It should be clear that there really is no market competition or savings as a result of the current managed care system.  The only management that is being done is managing to put a significant portion of your personal finances in the control of the healthcare industry.  The best solution is to get rid of this system rather than continue to tax Americans to subsidize companies whose products have value only in an artificially inflated marketplace - inflated by this health care tax.       


George Dawson, MD, DFAPA

References:

1: Manivannan, Veena et al. “A Multifaceted Intervention Increases Epinephrine Use in Adult Emergency Department Anaphylaxis Patients.” The Journal of Allergy and Clinical Immunology. In practice 2.3 (2014): 294–299.e1. PMC. Web. 30 Jan. 2016.

2: Westermann-Clark E, Fitzhugh DJ, Lockey RF.  Increasing cost of epinephrine autoinjectors. J Allergy Clin Immunol. 2012 Sep;130(3):822-3. doi: 10.1016/j.jaci.2012.06.018. Epub 2012 Jul 22. PubMed PMID: 22828415.

3:  Linda J. Blumberg, John Holahan, and Matthew Buettgens.  How Much Do Marketplace and Other Nongroup Enrollees Spend on Health Care Relative to Their Incomes?  Robert Wood Johnson Foundation; Urban Institute.  December 2015.  Accessed on January 29, 2016.