Rising Drug Costs Affect Everyone

You’ve probably heard by now that the price of the life-saving EpiPen auto-injector has ballooned by 400 percent since 2007. The EpiPen is just the latest pharmaceutical to grab headlines in a series of recent drug-price hikes that also include insulin and Albuterol, a drug used to treat asthma. While drug price hikes affect some families more than others, drug prices will impact every West Virginian, even if you don’t actually use the medication yourself.

 

Here’s how that works.  

Kimberly Earl’s youngest son is asthmatic and allergic to peanuts. His newest EpiPen prescription cost the family $500, and he’s not the only one with medication needs.  

“I have a 13-year-old who’s a pediatric cancer survivor,” Earl said. “I have two children who are allergic to foods, medications and environmental factors, and both of those children both have asthma.”

 

The Earls have Blue Cross Blue Shield of Texas that they purchase through Mr. Earl’s employer. It’s a high deductible plan, which means they have to pay $10,000 out of pocket before their insurance kicks in.

 

Last year two of the Earl’s four children needed new EpiPens, but the Earls didn’t have enough money for two boxes at the $600 price – even with a $100 discount from the drugmaker Mylan Pharmaceuticals.

 

“Allergy kids who experience anaphylaxis should carry two pens at all times, because rebound reactions can occur within 20 minutes,” Earl said. “So if you don’t have medical help within those 20 minutes and they start to swell, you administer a second pen. We took the pens and we split the two pens between two kids. And I actually took the pens out and wrote on the top ‘use this one first’ on the current pens [and] ‘use this one second’ on the expired pens. So each kid was walking around with one current pen and one expired pen, and we were just hoping that if there was an issue they wouldn’t have to use that second pen.”

 

But for West Virginians with Medicaid, drugs like EpiPens are free. 

 

“Medicaid is quite a different system than private insurance,” said James Becker, M.D., the medical director for West Virginia Medicaid. Medicaid provides health care for those below a certain income threshold and at-risk members of society, such as people with disabilities. Since West Virginia expanded Medicaid under the Affordable Care Act, Medicaid now covers more than a third of its residents.

 

Medicaid is ultimately it’s through state and federal taxes. Basically, taxes become general revenue, which are the dollars that are spent in the budget. The WV Department of Health and Human Resources and other state agencies present a budget to lawmakers. When approved, money from that agency budget helps pay for programs such as Medicaid.

“So when the cost of a drug goes up dramatically, that impacts our system, and we have to step in and make adjustments to regulate the drug appropriately,” said Becker.

 

Let’s break this down further. One way the health department can regulate the cost of drugs is by negotiating for lower prices through the federal rebate program. The federal rebate program is a complex system, but basically comes down to the more Medicaid patients, the more bargaining power with drug companies to lower prices. Another way Medicaid manages costs is by using older, cheaper, but still effective drugs.

 

But even with these measures, more costly drugs mean that the department has to shift around funds to accommodate higher costs.

 

“Certainly for Medicaid funding in West Virginia that’s a huge cost,” said former WV Senate Health Chair Ron Stollings. “And so when we have to put money into funding Medicaid, we have to cut funding for higher education and secondary education, we have to put off paving projects, etcetera.”  

 

Stollings says rising Medicaid costs – partially due to higher drug costs – also may mean that you, the taxpayer, may end up paying more taxes to fund the budget, given that Medicaid must absorb the higher drug prices – even if you don’t actually use the drug yourself.

 

“If it costs more to deliver a service, then insurance basically spreads the risk over a large population so the entire population that’s covered then has to pay more,” said Stollings.

So, “if you’re a taxpayer, it impacts you,” he added. “If you’re insured, it will impact your premiums. And if you are on Medicaid, you may get this expensive medication, but they may be ratcheting down coverage for other things.”

 

So the bottom line is that no one is immune to drug price increases. A family with private insurance may feel the pain immediately by having to make tough decisions about what kind of drugs to buy [and] when, and by rising monthly premiums. A Medicaid family may not get the same sticker shock, but is certainly affected. 

 

Editor’s Note: This story was updated on 9/28/2016.

 

Appalachia Health News is a project of West Virginia Public Broadcasting, with support from the Benedum Foundation.

Mylan CEO Infuriates Lawmakers at Hearing on EpiPen Costs

Mylan CEO Heather Bresch infuriated lawmakers as she tried to explain steep cost increases of her company’s life-saving EpiPens.

Outraged Republican and Democratic lawmakers on Wednesday grilled Bresch about the emergency allergy shot’s sky-high price and the profits for a company with sales in excess of $11 billion. The list price of EpiPens has grown to $608 for a two-pack, an increase of more than 500 percent since 2007.

In almost four hours of questioning, the soft-spoken CEO at times seemed unsure when asked questions about the company’s finances and profits, angering lawmakers.

House Oversight and Government Reform Chairman Rep. Jason Chaffetz of Utah said he didn’t believe Bresch was being candid with lawmakers.

Bresch said she wishes Mylan had “better anticipated the magnitude and acceleration” of rising prices.

Bresch is the daughter of West Virginia’s Democratic Sen. Joe Manchin. Mylan Pharmaceuticals has a large operation in Morgantown, W.Va.

Who's to Blame for the $600 EpiPen?

It seems like everyone is angry about the huge price increase of Mylan’s EpiPen. But what’s the real cause?

On “The Front Porch” podcast, Laurie Lin blames federal regulations which inhibit market competition.

We also discuss the future of the Affordable Care Act. Both Bill Cole and Jim Justice, the two leading candidates in West Virginia’s 2016 gubernatorial election, have said they will maintain the state’s expansion of Medicaid under the Affordable Care Act.

In the second segment of the program, we discuss the pros and cons of this expansion, and what it means for the future of health care in the state.

Subscribe to “The Front Porch” podcast on iTunes or however you listen to podcasts.

An edited version of “The Front Porch” airs Fridays at 4:50 p.m. on West Virginia Public Broadcasting’s radio network, and the full version is available above.

Share your opinions with us about these issues, and let us know what you’d like us to discuss in the future. Send a tweet to @radiofinn or @wvpublicnews, or e-mail Scott at sfinn @ wvpublic.org

The Front Porch is underwritten by The Charleston Gazette Mail, providing both sides of the story on its two editorial pages. Check it out: http://www.wvgazettemail.com/

Senate Panel Opens inquiry into EpiPen Pricing

A Senate panel has opened a preliminary investigation into why the price of lifesaving EpiPens has skyrocketed.

The top Republican and Democrat on the Senate Homeland’s investigations subcommittee said in a statement Wednesday that they began an inquiry into Mylan Pharmaceuticals’ pricing and competition practices. Mylan has been sharply criticized for its steep price increases for the emergency allergy treatment EpiPen.

The price has grown to $608 for a two-pack, up more than 500 percent since 2007. The drugmaker has announced it will launch a generic version that will cost $300 in the next several weeks.

GOP Sen. Rob Portman of Ohio and Democratic Sen. Claire McCaskill of Missouri head the panel.

Heather Bresch, CEO of the pharmaceutical company, is the daughter of Democratic Sen. Joe Manchin of West Virginia.

Twenty Democratic Senators Blast Steep Price Hike for EpiPens

Twenty Democratic senators are demanding answers about steep price hikes for the life-saving EpiPen injector device.

The senators said in a letter to the CEO of pharmaceutical company that makes the devices, Mylan N.V., that price hikes of more than 500 percent have jeopardized access to emergency allergy shots for many Americans. The letter was addressed to Heather Bresch, daughter of Democratic Sen. Joe Manchin of West Virginia. Manchin did not sign the letter.

Mylan has responded to the public outcry by expanding programs to make EpiPens more affordable and promising a cheaper, generic version.

But the senators who signed the letter say the generic device still costs three times more than the branded EpiPen did in 2007. They are asking Mylan to answer detailed questions by Sept. 12.

Senator Manchin Mum on EpiPen Hikes by Daughters Company

As a pharmaceutical company run by U.S. Sen. Joe Manchin’s daughter faces scrutiny for hiking prices on life-saving allergy injection pens, Manchin is remaining mum.

The Democratic West Virginia senator’s daughter, Heather Bresch, is CEO of Mylan, which manufactures EpiPens.

A two-dose package cost around $94 nine years ago. The cost averaged more than six times that in May.

Manchin spokesman Jonathan Kott said Wednesday the senator had no comment.

Several senators are demanding more information and requesting congressional hearings and investigations.

Sens. Amy Klobuchar of Minnesota and Richard Blumenthal of Connecticut want the Federal Trade Commission to investigate Mylan for possible antitrust violations.

Hillary Clinton, whom Manchin has endorsed for president, called the increase “outrageous.”

A Mylan statement Tuesday cited health insurance changes with higher deductible costs for many.

Exit mobile version