Canadian Regulatory System Prevents Exorbitant EpiPen Price Hikes

Health care and consumer experts have been vocal since the announcement of Mylan’s EpiPens price increase to over $600 a twin pack that the structure of federal regulations and health insurance drug coverage are in large part responsible for the steep price hike.

This seems to ring true even if the consumer can’t fathom all the intricacies of the rules and regulations just by comparing the absence of a comparable price hike in Canada to that of the price hike of the epinephrine auto-injecters in the United States. In May 2016, when the retail price of twin pack Epipens was raised from about $450 to about $608 in the US, Canada’s EpiPen price was about C$120 per pen, rather than per twin pack.

Laurie Harada, executive director of Food Allergy Canada, minced no words in explaining the difference in price for the same drug between the two countries, “The regulatory pricing system here is different than in the U.S., and so we have not seen huge increases for the device year over year.”

Pharmaceutical manufacturer Mylan took advantage of existing federal regulations, understood and worked within boundaries established by pharmacy benefit managers, a little known but powerful set of gatekeepers for health insurers who negotiate with drug makers on prices – or even whether a particular drug will be covered in the insurer’s formulary.

Although it may be difficult to sympathize that Mylan states it only profits $274 on each $608 twin pack of EpiPens sold, that is still a lot of money going into the pockets of middlemen along the way for a product that may have an actual value of about $4/twin pack.

With some members of Congress expressing concern about Mylan’s price hike, it would seem that it’s not only the drug manufacturer who shoulders the blame. Mylan gamed the system in place. Only Congress can change that system if the concern is genuine and no merely another episode of finger-pointing before the next sound byte comes along.

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