use this evidence: The EpiPen is a type of epinephrine injector (EPI), which is an essential device for
anyone who suffers from severe allergic reactions. Patients who suffer from such allergic
reactions are meant to carry around two EpiPens, one in case of exposure to an allergen and a
second in case the first EpiPen fails or if there is an exceptionally long time between the first
injection and emergency medical care. In 2007, Mylan Pharmaceuticals purchased rights to
manufacture the EpiPen from Merck, and in the subsequent years it raised the price 400%,
leading to public outrage due to price gauging and harm to patients who require EpiPen to save
them from life-threatening situations (Markovich, 2021).
Much analysis has been done on this case and the economic factors that lead to it, as well
as the impacts that it had on patients. It is well understood that Mylan raised the price much more
than what would be needed just to only sustain improvements in the product, and that the
company harmed patients by raising the price so egregiously. However, an analysis of the ethical
conduct of the company and a detailed examination of Mylan’s individual actions has not been
done. In the absence of this type of analysis, researchers cannot truly understand what drove
Mylan to make its decisions and reflect on what actions influenced its overall attitude.
In what follows, I analyze Mylan’s actions through the lens of virtue ethics which allows
me to examine how the company failed to put into practice some of the traits that characterize
virtuous engineering practice. I will evaluate the morality of the company’s actions that with
respect to three of the traits necessary for morally responsible engineers, which are clear and
informative communication, cooperation, and willingness to receive criticism. My analysis of
Mylan’s actions following its acquisition of EpiPen draws attention to the way the company
failed to embody these three virtues of professional engineering.
2
Literature Review
There is a large amount of literature about Mylan’s acquisition of the EpiPen and the
subsequent increase in EpiPen price over the years that follow. This writing focuses on the facts
of the case and the impacts that it has had on patients who require epinephrine autoinjectors
(EAIs). They also discuss many of the economic factors that contribute to this case as well as the
controversy that was shown to the public. However, scholars tend to avoid making ethical
judgements of the company’s actions in their writing, and focus on the factual causes and
implications of this case.
Figure 1. Average wholesale price for EpiPen from 2007 to 2016 (Westermann-Clark, 2018)
In Economic considerations in the treatment of systemic allergic reactions, Emma
Westermann-Clark gives a background of the epinephrine autoinjector market and describes the
major players that affect the costs of this healthcare tool. She goes on to graphically demonstrate
the price increase that occurred after Mylan acquired the EpiPen from Merck in 2007, as can be
3
seen in Figure 1. She then discusses how EpiPen has continued to hold the main market share for
EAIs, highlighting that the FDA does not allow EpiPen prescriptions to be substituted for other
epinephrine autoinjectors at a pharmacy. The article discusses the impact of price on the amount
of patients who actually dispense their prescriptions, claiming that, “more than 50% of EpiPen
prescriptions are abandoned or not filled when the cost exceeds $300 for a 2-pack”
(Westermann-Clark, 2018). Finally, Westermann-Clark illustrates how socioeconomic factors
impact patient’s access to epinephrine autoinjectors and how the price influences school districts
who are required to purchase EAIs for emergency allergic reactions.
Hayley Markovich highlights the media framing and presentation of this case to the
public through the article titled Severe Allergies, Price Increases, and Supply Shortages: How
News and Frames of the 2016 EpiPen Crisis Continue the Conversation of U.S. Pharmaceutical
Pricing. By analyzing the different frames by which television news outlets show this story to
the public, Markovich desires to better understand how to communicate issues in a way that
leads to lasting change. The news segments that she analyzed mainly focused on affordability,
attribution of responsibility, morality, and power structures, bringing light to multiple stories of
people struggling to afford their children’s lifesaving medication. Markovich also highlights the
statements by Mylan Pharmaceuticals and other key industry representatives, stating that,
“insurance companies, drug makers, and pharmaceutical benefits managers blamed each other
for high medication prices, each refusing to claim responsibility” (Markovich, 2021). Overall,
this article highlights the key issues in this case and how it affected patients.
Finally, in Health Care Fraud: The Leading Violation of the False Claims Act, Eli
Adashi summarizes the leading health care schemes in which taxpayer money was misused in
violation of the False Claims Act (FCA). The FCA is an act from 1863 which focuses on the
4
knowingly false or fraudulent submission of claims for payment to government healthcare
programs, such as Medicare or Medicaid, and institutes a system for damages to be paid for these
claims. Adashi writes about how Mylan Pharmaceuticals falsely claimed EpiPen as a generic
medicine so that the company would not have to pay rebates to Medicaid, despite there being no
FDA approved alternatives to EpiPen (Adashi, 2022). Therefore, Mylan knowingly avoided this
program which was put in place to ensure that Medicaid programs are not susceptible to pricegouging.
Together, these authors paint a picture of Mylan’s actions through a factual approach.
While Adashi and Westermann-Clark highlight the facts of Mylan’s handling of the EpiPen and
the effects that it has had on patients, Markovich illustrates the way that the company interacted
with the media and criticism they received. However, none of these authors analyzed the
company’s actions as a whole that brought it to have such a large impact or attempted to assign
moral judgement to Mylan. With a product that has the opportunity to affect millions of patients,
it would be helpful to determine what practices can lead to price-gouging at this level. This paper
will provide an in-depth look at the actions of Mylan Pharmaceuticals and utilize the virtue
ethics framework to form a moral judgement of the company.
Conceptual Framework
In order to analyze the actions taken by Mylan Pharmaceuticals, I will draw on virtue
ethics, which will allow me to assign morality to the actions taken by this company after its
purchase of EpiPen. Virtue ethics is an ethical theory that focuses on the values of the actor and
emphasizes the development of character traits that make one virtuous (van de Poel &
Royakkers, 2011). According to Aristotle, who developed this idea originally, the goal of human
5
action is to strive for eudaimonia, or the highest good to humanity. This requires us to strive to
embody positive character traits such as reliability, honesty, and responsibility through all of our
actions, which requires humans to utilize our unique reasoning skills to identify how to follow
through with these virtues.
However, there is no one list of positive virtues within this ethical theory that could be
applied to any one situation (van de Poel & Royakkers, 2011). As the development and creators
of important technology such as medical devices are often engineers and scientists, Mylan should
embody the virtues of morally responsible engineers. For this purpose, I will utilize Michael
Pritchard’s list of Virtues for Morally Responsible Engineers, which should influence the ethical
creation and distribution of technology.
Pritchard notes in the creation of this list that simply having these values may not be
enough to certify an engineering project as morally responsible, but lacking them indicates a
failure to create simply competent engineering practice (Pritchard, 2001).
Throughout this paper, I will determine if Mylan Pharmaceuticals demonstrates these
virtues through its actions in its handling of the EpiPen product. I will utilize evidence of
repeated actions and statements from the company, which will allow for the judgement of the
ethical character of the company. In order to focus this discussion, I will specifically center my
1. Competence
2. Ability to communicate clearly and informatively
3. Cooperativeness (being a good “team player”)
4. Willingness to compromise
5. Perseverance
6. Habit of documenting work thoroughly and clearly
7. Commitment to objectivity
8. Openness to correction (admitting mistakes, acknowledging oversight)
9. Commitment to quality
10. Being imaginative
11. Seeing the “big picture” as well as the details of smaller domains
Figure 2. Pritchard’s Virtues for Morally Responsible Engineers (Prichard, 2001)
6
analysis on the virtues of clear and informative communication, cooperation, and willingness to
receive criticism.
Analysis
Mylan Pharmaceuticals showed poor adhesion to the virtues of clear and informative
communication, cooperation with government direction and other players in the epinephrine
autoinjector market, and willingness to receive criticism. This deficiency in adherence to these
values can be seen in the repeated actions taken by this company since its acquisition of EpiPen
from Merck in 2007. In order for ethically responsible engineering practice to occur, it is a
requirement that an actor follows all of the virtues for a morally responsible engineer, and that
even if one value is lacking the actor can be deemed irresponsible (Pritchard, 2001). Although
Mylan Pharmaceuticals could be deemed lacking in many of these categories, its failures can
specifically be seen through three values. Due to the requirement that an actor must follow all of
the virtues for morally responsible engineering, it follows that Mylan Pharmaceuticals was
immoral in its handling of the EpiPen. In the following, the text examines each of the three
virtues closely and gives evidence of Mylan’s failure to uphold these virtues.
Clear and informative communication
Mylan failed to communicate with patients and instead released confusing statements to
the media during the period of heavy criticism in 2016. In healthcare, effective communication to
the patient is paramount to ensuring that a patient can gain proper access to medicines and
understand their options in their own healthcare. Therefore, Mylan’s role in communication in
regards to the EpiPen is centered around its need to ensure patients understand the product and
7
the cost of what it takes to purchase one. However, Mylan failed to properly communicate the
cost of its product while creating fear and the idea that EpiPen was the only option for patients
dealing with severe allergies.
The first example of this occurring is after the media began covering Mylan’s price
increase of the EpiPen. The CEO of Mylan Pharmaceuticals, Heather Brech, accepted “full
responsibility” for the price hikes, and claimed that the cost increases funded improvements in
the EpiPen device (Silverman, 2016). She stated that the company invested a billion dollars into
the product improvements. However, she refused to detail how much of this cost went into the
companies lobbying campaign versus real product development, and how these improvements
were worth a price increase of 550% for patients. It is apparent that there is a lack of
communication and transparency from Mylan in regards to the company’s actions.
Despite the CEO’s statement of full responsibility, the company went on in other
communications to blame others and attribute the issue to the health care industry as a whole.
Bresch claimed that, “the reality is in the brand pharmaceutical market this isn’t an EpiPen issue,
this isn’t a Mylan issue, this is a healthcare issue” (Markovich, 2021). She went on to state how
the healthcare system is failing patients by allowing them to go to the pharmacy to dispense the
drug without knowing what the price will be (Silverman, 2016). Although there are many issues
in the American healthcare industry, this statement stands in stark contrast to Bresch’s previous
statement of accepting full responsibility. This clearly indicates a lack of clear communication
about the product and about where the issue truly stems from.
Mylan’s confusing statements contribute to the confusion around the issue of EpiPen
pricing as the company refuses to provide clear statements on the reality of the EpiPen price
increases. These statements stem from multiple interviews and hearings, showing that this is a
8
repeated pattern for Mylan. Altogether, the comments from Mylan demonstrate a clear poor
ability to adhere to the virtue of communication which, according to virtue ethics, can only draw
the conclusion that it had acted unethically.
Cooperation
In addition, Mylan failed to cooperate with other players in the epinephrine injector
market and government entities who were attempting to provide better access to EPIs. As a
virtue, cooperation means to work with others who have the same goal. Therefore, for a company
such as Mylan Pharmaceuticals who has the goal of ensuring that more people have access to
epinephrine autoinjectors, it is important to work with others who have the same goal. In this
case, Mylan can be seen failing to work with the government and abide by rules that are put in
place to ensure equal access to EPIs, as well as fighting to shut down potential competitors.
In the American healthcare system, the government’s role is to fill in where there are
issues with the market and ensure fairness in the system (Tang, 2004). The government does this
in multiple ways, including insuring healthcare assistance through Medicaid and insurance to
older people and disabled people through Medicare. In addition, the government has worked to
reform the healthcare system through programs such as the Affordable Care Act.
One feature of Medicaid is called the Medicaid Drug Rebate Program, or MDRP,
wherein drug manufacturers help to offset the costs of prescription medicines to Medicaid
patients by paying rebates to the government in order for Medicaid patients to get the best price
possible for drugs (Centers for Medicaid & Medicaid Services, 2021). These rebates are set as a
percentage of the drug’s average manufacturer price, and vary depending on the category of
drug, with the largest rebates required for brand-name drugs.
9
However, Mylan failed to cooperate with this program by lying about its product while
registering for the MDRP. At the time, EpiPen was listed with the U.S. Food and Drug
Administration as a brand name drug and was marketed as such (CNBC, 2017). However, Mylan
misclassified the EpiPen as a generic drug to the MDRP in order to avoid paying the larger
rebate required for brand name drugs, skirting a program designed to ensure Medicaid was not,
“susceptible to price gouging by manufacturers of drugs that were available from only a single
source” (Adashi, 2022). In 2009, Mylan was subject to a lawsuit for this misclassification and
fined $465 million dollars due to this error. Through this lawsuit, the Department of Justice
determined that Mylan did this knowingly.
If, as Mylan and its executives have said, providing access to these important live-saving
medical devices is important to them, they should be inclined to support such a program and
follow the guidelines as required. However, they failed to work with the MDRP and collaborate
to ensure that this program with the same goals as them is successful.
Another example of Mylan’s failure to cooperate with those who have the same goals as
them can be seen through its aggressive fight to keep competition out of the market. In 2015,
Teva Pharmaceuticals was poised to launch its generic epinephrine autoinjector and gain
approval from the FDA through an Abbreviated New Drug Application (ANDA) which allowed
them to use EpiPen’s safety data to avoid these safety trials themselves (Carrier, 2017). Mylan
fought to delay this ANDA, first with lawsuits and then by filing a citizen petition stating that
patients would not be able to understand how to use Teva’s EPI, as it worked differently from the
EpiPen. This worked in Mylan’s favor to delay Teva’s generic version of the EpiPen, allowing
Mylan to maintain its majority share of the market until 2018 when Teva’s generic EPI finally
became available.
10
As I have shown, Mylan provides poor cooperation with those who desire to provide
access to EpiPens. Some may say that EpiPen manufacturers can set the price of the device to as
high as they need and fight to keep its product unchallenged, because Mylan offers programs to
aid low-income patients in receiving its EpiPen. If uninsured patients apply, they can receive two
EpiPens for free, so Mylan must be serious about providing for patients. However, this view fails
to consider that a large portion of patients are able to afford insurance, making them ineligible
for this program, but still have high deductibles. Many Americans have insurance for
emergencies, but still must pay large amounts of money to reach their deductible and gain any
coverage from their insurance provider (Willingham, 2016). Therefore, these are the people who
are largely suffering from the EpiPen prices.
Mylan clearly failed to cooperate with Teva and fought against its generic version of
EpiPen being approved as hard as it could. Mylan also failed to cooperate with a program
specifically designed to aid low-income patients in receiving live-saving drugs. It worked to
avoid government requirements and to maintain exclusivity for its own gain. These actions show
repeated inability to work towards the common good and demonstrate a lack of adhesion to the
virtue of cooperation. Therefore, Mylan acted unethically as it lacks one of the core virtues for
morally responsible engineering practice.
Open to criticism
Finally, Mylan fought heavily against any criticism that was levied against them. The
ability to receive criticism with acceptance and understanding is an essential trait to one
designing and marketing a product, as there are always room for improvements that may not be
obvious to the originator. This virtue can be observed by taking criticism and either adjusting
11
one’s actions accordingly or seriously evaluating the criticism for future actions. Through
Mylan’s actions, it is clear that it failed to take the high amounts of criticism and change its
actions or product, and in some cases attempting to shut down all criticisms instead.
Before Mylan acquired the EpiPen in 2007, the device was manufactured by Merck and
costs for the product was approximately $114 for a two-pack, which is the standard amount to
for patients to receive from the pharmacy at one time, in case one EpiPen fails (Willingham,
2016). However, by 2016, the price for the EpiPen was increased to $500 or more, leading to a
large media backlash and heavy criticism that same year. This criticism was heavily directed
towards Mylan for price gouging and depriving patients of medicine that is essential if they were
to come in contact with an allergen and in turn have a severe allergic reaction. The backlash was
not for no reason either, as many low-income patients were unable to fill their prescriptions, with
evidence citing that more than half of EpiPen prescriptions are not filled by patients once the cost
of a 2-pack exceeds $300 (Westermann-Clark, 2018).
During this period of heavy criticism, Mylan executives took to news outlets to blame
anyone other than themselves for this issue (Markovich, 2022). In addition, since the criticism,
the company has continued to raise the cost of its EpiPen, and now a pack can cost even up to
$730.33 (Westermann-Clark, 2018). This clearly demonstrates a failure to respond to criticism
from the public and patients who need EpiPen.
In a different manner, Mylan Pharmaceuticals also shut down criticism forcefully. In
2009, the Pittsburg Post-Gazette wrote an article about poor quality control procedures at
Mylan’s plan in Morgantown, Pennsylvania, detailing how workers routinely ignored warnings
about potential manufacturing problems. In return, Mylan filed two defamation lawsuits, one
12
claiming that the Post-Gazette misappropriated trade secrets and another claiming that the PostGazette distorted the facts in its article (Adams, 2009). These lawsuits were later dropped.
These examples clearly demonstrate Mylan’s pattern of avoiding criticism and shutting it
down where possible, instead of utilizing criticism to improve its work. Therefore, it failed to be
open to criticism and, accordingly, lack this virtue. As has been previously stated, the lacking of
one virtue allows for them to be deemed immoral according to virtue ethics theory.
Conclusion
Through detailed evidence of Mylan’s actions since 2007, it is possible to judge its
actions and the character of the company. These actions show Mylan lacked in three character
traits that are essential to morally responsible engineers: clear and informative communication,
cooperation, and willingness to receive criticism. If analyzed through a virtue ethics framework,
Mylan acted unethically because it failed to demonstrate virtues that would have been illustrated
by a virtuous actor.
A benevolent healthcare system is essential to building a thriving and successful society,
and ensures that citizens are kept healthy. However, many healthcare companies are driven by
their own profit motives and neglect the causes that brought them into existence in the first place,
namely providing access to medicines. By evaluating what brought one pharmaceutical company
to greed, the virtues which it lacked can be emphasized and upheld as future engineers enter into
the workforce. Keeping these virtues in mind can help healthcare systems improve and deliver
on their promises to help patients.
Viatris, the drugmaker previously known as Mylan, announced on Monday that it had agreed to pay $264 million to settle a class-action lawsuit that alleged the company was involved in an illegal scheme to monopolize the market for epinephrine auto-injector devices known as EpiPens, which are used to treat severe allergic reactions.

The proposed settlement, which needs to be approved by a judge, would resolve a legal battle that began after Mylan, in 2016, raised the price for a pack of two EpiPens to $608 from $100, the price since 2007, according to court documents.

In the lawsuit, a group of plaintiffs made up of consumers, health insurance companies and other third-party payers alleged that by drastically raising the price of EpiPens, the drugmaker was “unlawfully exercising its monopoly power,” according to a complaint.

“Were the price increases attributable to market conditions, increases in manufacturing costs or shortages in the supply of epinephrine?” the complaint said. “Absolutely not. They were driven solely by unaccountable executives and companies who sought to profit off of human misery and fear.”

Many people involved in the lawsuit had paid thousands of dollars for EpiPens over the years, including a mother from Arizona who had paid $2,475 out of pocket for her son who is allergic to tree nuts and peanuts, and a father from Delaware who spent more than $1,100 on EpiPens for his son who is allergic to milk, eggs and peanuts, according to the lawsuit.

EpiPens are made by two subsidiaries of Pfizer — King Pharmaceuticals and Meridian Medical Technologies — and are sold by Viatris.

In July, Pfizer and its subsidiaries settled its part of the lawsuit for $345 million, and denied any wrongdoing.

In its quarterly earnings report on Monday, Viatris said that the company “maintains that it acted lawfully and pro-competitively and the settlement contains no admission of liability.”

“The board of directors believes that this settlement is in the best interests of the company and its stakeholders,” the report said. “The resolution of these indirect purchaser cases will allow the company to move forward and continue focusing on its strategic priorities and its mission of empowering people worldwide to live healthier at every stage of life.”

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Neither Viatris officials nor lawyers representing the company immediately responded to a request for comment on Monday night.

Our business reporters. Times journalists are not allowed to have any direct financial stake in companies they cover.

Lynn Sarko, a lawyer representing the plaintiffs, said in a statement that he urged consumers and third-party payers who paid for EpiPens to learn more about the settlement at a website where claims can be filed.

“We are pleased that the EpiPen antitrust litigation is now concluded,” Paul Geller, another lawyer representing the plaintiffs, said in a statement, adding that the settlement is subject to court approval.

The lawsuit also alleged that the drugmaker misclassified EpiPens under the Medicaid Drug Rebate Program to save hundreds of millions of dollars in rebates, and that it intervened in regulatory proceedings to delay competitors from entering the market.

The price jump in 2016 drew widespread outrage, especially among parents of children with allergies. Thousands of people signed a petition urging Congress to intervene.

After protests over the company’s raising the price of EpiPens in 2016, Mylan, as Viatris was then known, introduced a generic version of its own product. But it was announced with a wholesale list price of $300 for a pack of two, half the price of the brand-name EpiPen.

In 2016, Mylan reached a $465 million settlement with the Justice Department and other government agencies over allegations that the drugmaker had overcharged Medicaid for the treatment by improperly classifying it as a generic drug.

EpiPens As the CEO of the drug maker that sells the EpiPen allergy-reaction injector defended the company’s six-fold price increases before Congress last week, it’s appalling to see that Heather Bresch took no fault. The company’s price hikes on a life-saving drug is clearly unethical if we take a closer look.


EpiPen has gone from $100 for a two-pack in 2009 to $608 today. Usually, companies would be applauded for the ability to create revenue through such pricing power. But when it comes to life-saving drugs, consumers interpret these significant increases as the producer profiteering off a person’s life or death need.

This is (not) unlike what happened at Turing Pharmaceuticals last year when the company increased the price of Daraprim from roughly $15 to $750.

Like many, I had to ask: are these prices ethical?

In the book, The Strategy and Tactics of Pricing: A Guide to Growing More Profitably, the authors present a five-step test to determine if a price is ethical. Here’s a look at how Mylan’s Epipens would perform under the test:

Test #1: the exchange (transaction) is ethical when the price is paid voluntarily. The buyer is aware of how much the item costs and voluntarily completes the transaction. For this level, Mylan has passed at an elementary understanding. People are still buying EpiPens.

Test #2: The buyer is provided ample information about the product. This expectation comes with any purchase. The seller is not misleading consumers or omitting crucial information. Smokers still purchase cigarettes, despite the full disclosure of health risks. For this level, Mylan still passes the test.

Test #3 and #4 are not as simple, so let’s come back to them later in this article.

Test #5: The exchange must present equal access to goods regardless of ability to cover the cost. Consumers have access to discounts based on financial need and Mylan also provides free EpiPens to schools and funds activities related to allergy awareness. They continue to pass the test for now.

OK, now let’s get back to Test #3 and #4. Here is where consumer outrage and the case for unethical behavior becomes stronger.

Test #3: This stipulates that sellers cannot exploit a buyer’s essential needs. Test #4: This states the price must be justified by costs.

There should be no excessive, unjustified profits on essentials. For example, if a person was having a heart attack and needed emergency treatment, hospitals would first treat the patient before collecting a deposit upfront to ensure the patient can pay for their services.

In 2011, the list price for the EpiPen was $165. At that time, there were no competitors in the market and the product was off patent, meaning the patent protection had expired. Further, there was consistent demand due to the product’s shelf life of one year. Customers had to replace their EpiPens annually.

In 2012, the list price increased 32% with no new competitors entering the market. However, this increase could have resulted from more R&D spending or an increase in raw materials costs. Regardless, the price was elastic and consumers continued to purchase the drug.

By 2013, Sanofi announced its entry into the market. Their price hovered near that of Mylan’s, so it would appear the price was justified by cost. Had Sanofi entered with a lower or higher price, this justification would have been tougher to sell. Mylan responded by increasing their price a little more, which likely came from a desire to differentiate themselves as the premier brand with superior products.

At this point, Mylan was still within the ethical constraints put forth above. This changed when Sanofi, Mylan’s sole competitor, was forced into a product recall and left the market. Mylan once again had a monopoly.

Typically, in this situation, the price would remain the same or increase nominally with inflation and other standard considerations. Instead, Mylan increased the price from $300 to $600 over two years. In 2015, Mylan reported a net profit margin of 8.9%, but some speculate the margin for the EpiPen was closer to 55%, thus breaking the ethical constraints of Test #3 and #4.

While individual consumers may not have had a voice or recourse, the market did. Mylan may have improved its margins and ultimately driven higher returns and shareholder value, but within a week the price increase cost the company $3 billion in market cap and a stock tank of over 12% in 5 days.

They attempted to rectify the issue and announced a generic brand of the EpiPen with a list price of $300. Because of this misstep, though, every price change now will come under extreme scrutiny.

The ethics of pricing is a minefield for any company to navigate. Nominal price increases are annoyances to customers and consumers, but they—for the most part—will not be met with extreme criticism. As long as a company is transparent about price increases and can demonstrate that such a change is justified—or at least has the consumers’ faith that this is true—they should be able to avoid a public maelstrom.

If the Mylan debacle demonstrates anything, it shows that even in markets that have little pricing regulation and transparency, pricing moves must be carefully considered and communicated in a way that demonstrates ethical behavior in the best interest of both the consumer and the company.

Daniel Kozarich is a senior pricing consultant for Vendavo, a Mountain View, CA-based company that advises companies on pricing their products. Using this evidence answer this prompt: To what extent has the exorbitant price of Epi-pens been ethically and economically adequate? Make an intro with a thesis, make big body paragraphs and a profound conclusion.


Economic considerations in the treatment of systemic allergic reactions
Emma Westermann-Clark,1,2 Amber N Pepper,1,2 and Richard F Lockey1,2
Author information Copyright and License information PMC Disclaimer
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Abstract
Epinephrine is a life-saving medication used to treat systemic allergic reactions including anaphylaxis. Epinephrine autoinjectors (EAIs) are expensive and worldwide availability is limited. Epinephrine prefilled syringes and epinephrine kits are potentially lower-cost alternatives to EAIs. Advantages, disadvantages, and costs of available products are discussed. The socioeconomic factors impacting access to EAIs are described.

Keywords: epinephrine, anaphylaxis, cost, price, autoinjector
Go to:
Introduction
Epinephrine is the first-line treatment for systemic allergic reactions (SARs) to foods, insect stings or bites, medications, and other allergens. The early use of epinephrine in SARs can be life-saving; delayed use has been associated with death.1–3 Cox et al updated the World Allergy Organization (WAO) grading system for SARs as summarized in Table 1 to clarify the early signs and symptoms of an SAR and to encourage early use of epinephrine.4 The term “SAR” applies to all grades with the term “anaphylaxis” also appropriate for grade 4 or 5 reactions.

Table 1
Proposed modification of the 2010 World Allergy Organization grading system

Grading system for SARs
Grade 1 Grade 2 Grade 3 Grade 4 Grade 5
Anaphylaxis
Symptom(s)/sign(s) from 1 organ system present
Cutaneous
• Urticaria and/or erythema-warmth and/or pruritus, other than localized at the injection site And/or
• Tingling, or itching of the lips* or
• Angioedema (not laryngeal)
Or
Upper respiratory
• Nasal symptoms (eg, sneezing, rhinorrhea, nasal pruritus, and/or nasal congestion) And/or
• Throat-clearing (itchy throat) And/or
• Cough not related to bronchospasm
Or
Conjunctival
• Erythema, pruritus, or tearing
Or
Other
• Nausea
• Metallic taste Symptom(s)/sign(s) from ≥2 organ symptoms listed in grade 1 Lower airway
• Mild bronchospasm, eg, cough, wheezing, shortness of breath which responds to treatment And/or
Gastrointestinal
• Abdominal cramps* and/or vomiting/diarrhea
Other
• Uterine cramps
• Any symptom(s)/sign(s) from grade 1 would be included Lower airway
• Severe bronchospasm, eg, not responding or worsening in spite of treatment And/or
Upper airway
• Laryngeal edema with stridor
• Any symptom(s)/sign(s) from grades 1 or 3 would be included Lower or upper airway
• Respiratory failure And/or
Cardiovascular
• Collapse/hypotension^ And/or
 Loss of consciousness (vasovagal excluded)
• Any symptom(s)/sign(s) from grades 1, 3, or 4 would be included
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Notes: The final grade of the reaction is not determined until the event is over, regardless of the medication administered to treat the reaction. The final report should include the first symptom(s)/sign(s) and the time of onset after the causative agent exposure and a suffix reflecting if and when epinephrine was or was not administered: a, ≤5 min; b, >5 min to ≤10 min; c, >10 to ≤20 min; d, >20 min; z, epinephrine not administered. Final report: Grade 1-5; a-d, or z; First symptom(s)/sign(s); Time of onset of first symptom(s)/signs(s). Case example. Within 10 min of receiving an AIT injection, a patient develops generalized urticaria followed by a tickling sensation in the posterior pharynx. Intramuscular epinephrine is administered within 5 min of symptoms(s)/sign(s) resulting in complete resolution of the reaction. The final report would be: Grade 2; a; Urticaria; 10 min.

*Application-site reactions would be considered local reactions. Oral mucosa symptoms, such as pruritus, after SLIT administration, or warmth and/or pruritus at a subcutaneous immunotherapy injection site would be considered a local reaction. However, tingling or itching of the lips or mouth could be interpreted as a SAR if the known allergen, eg, peanut, is inadvertently placed into the mouth or ingested in a subject with a history of a peanut-induced SAR. Gastrointestinal tract reactions after SLIT or OIT would also be considered local reactions, unless they occur with other systemic manifestations. SLIT or OIT reactions associated with gastrointestinal tract and other systemic manifestations would be classified as SARs. SLIT local reactions would be classified according to the WAO grading system for SLIT local reactions.33 A fatal reaction would not be classified in this grading system but rather reported as a serious adverse event.
^Hypotension is defined per the National Institute of Allergy and Infectious Disease/Food Allergy and Anaphylaxis Network Expert Panel criteria34: “Reduced blood pressure after exposure to known allergen for that subject (minutes to several hours). A) Infants and children: low systolic blood pressure (age-specific) or greater than 30% decrease in systolic blood pressure. Low systolic blood pressure for children is defined as follows: 1 mo to 1 y: <70 mm Hg, 1–10 y: <70 mm Hg + [2 × age], 11–17 y: <90 mm Hg. B) Adults: systolic blood pressure of less than 90 mm Hg or greater than 30% decrease from that person’s baseline. Reprinted from The Journal of Allergy and Clinical Immunology: In Practice, Volume 5(1), Cox LS, Sanchez-Borges M, Lockey RF, World allergy organization systemic allergic reaction grading system: is a modification needed? Pages 58–62.e55, Copyright 2017, with permission from Elsevier.4
Abbreviations: AIT, allergen immunotherapy; OIT, oral immunotherapy; SLIT, sublingual immunotherapy; WAO, World Allergy Organization.

Epinephrine autoinjectors (EAIs) were developed in the 1970s and were first approved by the US Food and Drug Administration (FDA) in the United States in 1987 with the EpiPen® (Mylan, Canonsburg, PA, USA). EAIs available in the USA include: EpiPen; epinephrine injection, United States Pharmacopeia autoinjector, generic (Mylan); epinephrine injection, USP autoinjector (Impax Generics, Hayward, CA, USA); and Auvi-Q® (Kaléo, Richmond, VA, USA).

The annual direct costs in year 2010 in the USA for EAIs are estimated to be $294 million, accounting for about 25% of the $1.2 billion annual cost to treat SARs including anaphylaxis.5,6 The average wholesale price (AWP) of each EAI is included in Table 2, except for the Auvi-Q. Accurate wholesale pricing for the Auvi-Q is not available as it is distributed through a single specialty pharmacy network. The complexity of drug pricing is beyond the scope of this article. Costs for the EpiPen were relatively stable until Mylan acquired this product from Merck (Kenilworth, NJ, USA) in 2007. The AWP since that time for two EpiPens has increased 545% from $113.27 to 730.33.4 This price increase persists even after accounting for inflation (Figure 1).7,8 Although the out-of-pocket expenses for individual subjects may have decreased since the public outcry about EpiPen costs in 2016, the effective date of the most recent AWP available is May 16, 2016 and does not reflect the impact of price cuts or patient assistance programs.7

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Figure 1
AWP for the EpiPen® 2001–2016.

Notes: AWP of an EpiPen 2-pack, or AWP of two EpiPens when sold individually, 2001–2016. The dotted line represents AWP in actual US dollars. The solid line represents AWP in constant year 2016 US dollars to adjust for inflation. Data were obtained from the Red Book Online System7 and converted into constant US dollars using the Consumer Price Index for medical care from the US Bureau of Labor Statistics.32 The most recent AWP available was effective date 5/16/16.

Abbreviation: AWP, average wholesale price.

Table 2
Average wholesale prices for epinephrine autoinjectors in the USA

Manufacturer Drug name NDC number Package size Dose AWP package price (US) Effective date
Mylan EpiPen® 49502-0500-02 2 ea 0.3 mg/0.3 mL 730.33 5/16/2016
Mylan EpiPen Jr. 49502-0501-02 2 ea 0.15 mg/0.3 mL 730.33 5/16/2016
Mylan Epinephrine injection, USP autoinjector 49502-0102-02 2 ea 0.3 mg/0.3 mL 375 12/15/2016
Mylan Epinephrine injection, USP autoinjector 49502-0101-02 2 ea 0.15 mg/0.3 mL 375 12/15/2016
Impax Generics Epinephrine injection, USP autoinjector 54505-0101-02 2 ea 0.15 mg/0.15 mL 494.01 10/1/2015
Impax Generics Epinephrine injection, USP autoinjector 54505-0102-02 2 ea 0.3 mg/0.3 mL 494.01 10/1/2015
Kaleo Auvi-Q® 60842-0022-01 2 ea 0.15 mg/0.15 mL 5400a n/a
Kaleo Auvi-Q 60842-0023-02 2 ea 0.3 mg/0.3 mL 5400a n/a
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Notes:

aAccurate AWP for Auvi-Q was not available because it is distributed through a single specialty pharmacy network.
Abbreviations: AWP, average wholesale price; ea, each; NDC: national drug code.

Use of the AWP is controversial, but it is often used as a proxy for societal cost in cost-effectiveness analyses.9 An economic analysis published in 2011 utilized the 2006–2007 AWP of the EpiPen to estimate the annual cost of EAIs for food-induced SARs.10 According to the International Society for Pharmacoeconomics and Outcomes Research good research practices guidelines from 2010:

Pharmaceutical prices used in the vast majority of cost-effectiveness analyses are either based on AWPs in the USA or government-negotiated prices in Europe. The former are not only imperfect measures of actual prices paid (e.g., ignoring discounts and rebates), but may also greatly overestimate societal opportunity costs because of the implicit inclusion of producer surplus created through patent-protected monopoly pricing.11

In summary, AWP is used as an approximation for societal drug costs, despite its limitations. The United States Department of Veterans Affairs (VA) Health Economics Resource Center (HERC) discusses the challenge of determining medication costs for research purposes. The HERC states, “We recommend using 121% of the drug costs reported in the Federal Supply Schedule, 152% of the VA cost, or 64% of AWP. To find the cost of a generic label prescription drug, we recommend using 27% of AWP.”9 Federal Supply Schedule prices are publicly available.12

Several factors limit the ability of newer products to garner and maintain a better market share versus Mylan’s EpiPen. First, the EpiPen has name recognition. Second, training for the use of each device is different. To illustrate, the epinephrine injection, USP autoinjector from Impax Generics requires the removal of two caps rather than just one. Although learning to use a new device can be challenging, novel design elements can improve safety and usability. An example is that the Auvi-Q has unique features including its rectangular shape intended to fit into a pocket, a retractable needle, and voice instructions. Third, insurance coverage differs for each EAI. According to the Managed Markets Insight and Technology database, the EpiPen has unrestricted access for 61% of commercial lives among 4624 commercial health plans.13 In contrast, Auvi-Q has unrestricted access for “19% of commercial lives in all locations” among these same commercial health plans.8 Even though Auvi-Q is not covered by many commercial insurance plans, the manufacturer offers it with $0 copayment to all commercially insured and Medicaid patients through a specialty pharmacy network distributor. Fourth, EAIs are rated “BX” by the FDA indicating that “data that have been reviewed by the Agency are insufficient to determine therapeutic equivalence” and when ordered may not be substituted by a pharmacist, one for another.14

The impact of copayments, coupons, and patient assistance programs on prices that subjects pay at the pharmacy counter requires further research. Pourang et al found that copayments did not affect the likelihood of an EAI being dispensed once it was prescribed in the Kaiser Permanente Health Maintenance Organization.15 However, while the authors indicate that nearly 30% of copayments exceeded $30, they did not consider higher copayments. Data are not available on prescription:dispense ratios for subjects with exceedingly high copayments or for uninsured and underinsured subjects who may pay retail prices. More than 50% of EpiPen prescriptions are abandoned or not filled when the cost exceeds $300 for a 2-pack.5 Two generic EAIs manufactured by Mylan have an AWP of $375. Two generic EAIs manufactured by Impax Generics have an AWP of $494.01. Patients with any commercial insurance plan or Medicaid receive Auvi-Q for $0 copayment through the specialty pharmacy network, ASPN Pharmacies LLC (200 Park Avenue, Suite 300, Florham Park, NJ 07932, 973-295-3289). All uninsured subjects who make <$100,000 annually have no copayment for Auvi-Q; uninsured subjects whose incomes exceed $100,000 pay no more than $360 for Auvi-Q.

Socioeconomic factors impact access to EAIs. Children from high-income versus low-income homes are 8.35 times more likely to be prescribed EAIs.16 Medicaid-enrolled children are less likely to receive EAIs prior to arrival at an emergency department.17 In another study, Caucasian versus non-Caucasian children were more likely to receive epinephrine early during an SAR.18 Early use of epinephrine was defined as epinephrine administered before arrival to the emergency department. Owning an EAI greatly increased the odds of early epinephrine treatment (odds ratio 12.67, 95% CI: 4.46–35.96). The authors did not assess insurance status but indicate that this finding suggests that there might be an economic influence on access to EAIs.18 Fleming et al examined the out-of-pocket costs for medications associated with food allergy and found higher costs for Caucasian and higher-income subjects.18 They hypothesize that Medicaid-enrolled children may have lower out-of-pocket costs, that is, lower copayments. To reduce or eliminate insurance copayments, Fromer suggests that epinephrine be classified as a preventive medicine by the US Preventive Services Task Force (USPSTF).5

Decision analysis software (TreeAge Pro, Williamstown, MA, USA) has been used to evaluate the cost of generic EAIs versus the EpiPen using a model that tracked spending for individual subjects over 20 years, with the assumption that each subject needs two 2-packs yearly, one each for home and school or work.19 The cost for the EpiPen over a 20-year model duration totals $58,667 (95% CI: $57,745–$59,588) versus $45,588 for the generic EAI (95% CI: $44,873–$46,304). The model also incorporates other food allergy-related costs, such as specialist visits, grocery costs, and loss of work time for parents of food-allergic children. These costs are assumed to be the same for all subjects regardless of the type of EAI prescribed.

The price of EAIs also affects school districts and communities. The Michigan legislature mandated that all public schools stock EAIs. It estimated the cost for two EAI 2-packs, one adult and one pediatric, at $140, while the “recently reported costs for commercial sources” was $1200, according to the authors of the article. The annual calculated cost to Michigan public schools based on these two cost estimates ranges from $565,460 to $4,846,800.20

A 2007 WAO survey of its House of Delegates indicates that EAIs are available in 59% of 44 countries surveyed.21 Those without EAIs employed other methods for the self-administration of epinephrine.22 These include the use of ampules of epinephrine 1:1000 (1 mg/mL) with an empty 1 cc syringe to be drawn up as needed or prefilled syringes containing various amounts of epinephrine. Both options are much less expensive than EAIs; for example, a vial of epinephrine 1:1000 (1 mg/mL) (Hospira, Lake Forest, IL, USA) had an AWP of $2.52 and retail price of ~$12 in 2016.7 Epinephrine ampules may not be available in all countries. Both options also allow for tailored dosing of epinephrine, above or below the standard 0.15 or 0.3 mg doses contained in most FDA-approved EAIs. This may be beneficial for children weighing <15 kg (33 pounds) or for large or obese subjects. Of note, in November 2017, the FDA approved an infant version of the Auvi-Q, Auvi-q 0.1mg, for children weighing 7.5–15 kg (16.5–33 pounds). It has a shorter needle and a smaller dose of epinephrine (0.1 mg versus 0.15 mg contained in other “junior” products).

Market forces appear to influence the cost of EAIs. For example, some US companies are offering low-cost alternatives. Symjepi™ (Adamis, San Diego, CA, USA) is an epinephrine prefilled syringe (EPS) that contains 0.3 mg of epinephrine, with a user-friendly design. It was approved by the FDA in June 2017 for subjects 30 kg (66 pounds) or more and is expected to be available at a lower cost than the current EAIs. A “junior” version is expected to follow. The concept of prefilled syringes is not new. The Ana-Kit® (Hollister-Stier Laboratories, Spokane, WA, USA) consisted of a syringe filled with 1 mL of epinephrine 1:1000 (1 mg/mL) housed in a protective case for subcutaneous injection before it was removed from the US market.23,24 The Ana-Kit syringe had 0.1 mL graduations so that smaller doses could be administered depending on the subject’s age. The instructions recommended the following doses: “Adults and children over 12 years: 0.3 mL; 6–12 years: 0.2 mL; 2–6 years: 0.15 mL; infants to 2 years: 0.05–0.1 mL.”25 An appropriate dose could be administered by pushing the syringe plunger until it stopped. A second dose could be administered as appropriate, after rotating the rectangular plunger ¼ turn to the right, to line up with a rectangular slot in the syringe.25 An advantage of the prefilled Symjepi syringe is that it is housed in a dark blue plastic encasement to protect the epinephrine from ultraviolet light degradation. Epinephrine degrades with exposure to ultraviolet light, oxygen in ambient air, and excessive heat.26–28 EPSs stored at room temperature in a pencil box maintain acceptable US Pharmacopeia concentrations (90%–115% of label claim), pH, and sterility for 3 months.22 The stability is limited to 2 months in high-temperature and low-humidity climates.22,29 In addition, some physicians and other health care professionals provide subjects with prefilled syringes wrapped in aluminum foil.28,30 These can be transported in a crush-resistant eyeglass case.

Snap Medical Industries (Dubin, OH, USA) has developed EpinephrineSnap-V® (a kit containing a vial of epinephrine 1:1000 [1 mg/mL] and empty syringes) and the EpinephrineSnap convenience kit (a kit containing an ampule of epinephrine 1:1000 [1 mg/mL] and empty syringes). The Focus Health Group, located in Knoxville, TN, USA, has been contracted to commercialize these products. The AWP of this product is $1567 although information from company officials states that the average price of EpinephrineSnap is $80 and the EpinephrineSnap-V is $130, with discounted group purchasing organization pricing available (Personal communication, November 1, 2017). Use of these options may not be as practical as is an EAI. The reason is that an epinephrine ampule or vial with an empty syringe requires more skill to properly draw up the epinephrine and administer it under emergency circumstances. Parents of individuals with a history of an SAR take longer to draw up epinephrine from an ampule (average 142±13 seconds) compared to emergency department nurses (29±0.09 seconds; p<0.05).31 The epinephrine dose drawn up by parents also ranged 40-fold as compared to twofold for emergency department nurses.31 The EpinephrineSnap products are geared toward use by emergency medical technicians and other health care professionals rather than individual subjects.

The rising cost of EAIs has made self-administered epinephrine potentially unavailable to some subjects. There are no data on deaths attributed to inability to afford EAIs. Lower-cost alternatives such as EPSs and epinephrine kits are entering the US market. EAIs have advantages, such as ease of use, but they are expensive. More research is needed on the complexity of drug pricing and on the optimal methods to determine individual and societal costs. Classifying EAIs as USPSTF preventive medicines could improve access by reducing or eliminating copayments. Use this evidence plus some business ideas from the book IB business and management, to make a lengthy big body paragraphs Business IA answering this prompt: To what extent has the exorbitant price of Epi-pens been ethically and economically adequate? Write about 1700 words