EpiPen price hikes add millions to Pentagon costs

Pentagon spending rose to $57 million over the past year from $9 million in 2008 — an increase driven both by volume and by price hikes that had a bigger bite on prescriptions filled at retail pharmacies, according to the previously unreported data.

The Pentagon gets a government discount on EpiPens dispensed at military treatment facilities and by mail order. But nearly half of its spending was at retail pharmacies where it most recently paid an average of $509 for EpiPen and $528 for EpiPen Jr two-packs — three times higher than its discounted rate, the data shows.

That may change. Both the Pentagon and Mylan told Reuters that discussions are underway that could extend the military discount to EpiPens filled at retail pharmacies through the use of rebates.

Mylan spokeswoman Nina Devlin declined to comment on the specific Department of Defence spending. She said in an emailed statement that talks were underway to address “any questions or concerns from the agency.”

She declined to say if any repayment was on the table.

A Reuters analysis of the data estimated a difference of about $54 million between what the agency paid for EpiPens at retail pharmacies from 2009 through 2016 and what it would have paid at military clinics.

Mylan Chief Executive Officer Heather Bresch has drawn public scrutiny for raising the US list price on a pack of two injectors nearly six-fold to $600 since 2008.

Affordability has become a bigger issue with the increased diagnosis and awareness of food allergies. Families who rely on EpiPens to safeguard their children against possibly fatal allergic reactions often purchase several to carry with them, keep at school and with caregivers.

In response to the criticism, Mylan is providing more families with coupons to pay for EpiPens and plans to market a half-price version. The drugmaker also agreed to pay $465 million to settle questions over whether the Medicaid programme for the poor overpaid because EpiPens were classified as a generic treatment, a category that allows manufacturers to give smaller rebates to government agencies.

While Medicaid providers don’t take issue with the increased use of EpiPens, they have bristled over the price hikes.

“The rate of increases in their cost is not justifiable,” said J Mario Molina, chief executive of Molina Healthcare, which runs Medicaid plans in California and 11 other states.

The impact of Mylan’s price hikes on government health programs, such as Medicaid, has been obscured by highly complex pharmaceutical pricing and opaque negotiations.

The Centres for Medicare and Medicaid Services, as well as several large state Medicaid programmes, have released partial details on their spending, saying full information on rebates is confidential under U S law. Without such details, it is impossible to discern what price an agency is paying for EpiPen.

At Reuters’ request, the Defence Department provided the most comprehensive picture of EpiPen spending by a government agency, including financial year expenditures since 2008, average price per pack and the number of prescriptions filled by type of dispensing location for all EpiPens obtained by military service members, their families and retirees.

The department’s spending on EpiPens has increased fivefold since 2008, far outpacing the 130 per cent growth in prescriptions, the data shows. Reuters