WASHINGTON – U.S. Sen. Amy Klobuchar of Minnesota has asked the Federal Trade Commission (FTC) to investigate whether a drug company violated antitrust laws by steeply increasing the price of a product that treats people suffering from severe allergic reactions.
After hearing from constituents, Klobuchar, whose daughter has nut allergies, questioned Mylan pharmaceutical’s decision to push the price of a dual pack of EpiPens from $100 in 2008 to $500-$600 in 2016.
“There does not appear to be any justification for the continual price increases of EpiPen,” Klobuchar, a Democrat, wrote to FTC chairwoman Edith Ramirez. “Manufacturing costs for the product have been stable and Mylan does not need to recover the product’s research and development costs because the product was on the market years before Mylan acquired it in 2007.”
In an interview, Klobuchar called epinephrine auto-injectors like the EpiPen a “life preserver” for millions of people, including her child. She called the Mylan price increases an application of “raw market power” by a company that controls virtually all auto-injector sales since competitors recalled similar products or failed to get approval for them.
Klobuchar spoke out about the EpiPen pricing in a Saturday Facebook posting that generated big digital buzz, then followed up with a news release Monday, the same day she sent her letter to Ramirez.
Other senators and representatives are calling for an accounting, including Charles Grassley (R-Iowa), Mark Warner (D-Va.) and Richard Blumenthal (D-Va.), who on Tuesday sent letters to Mylan CEO Heather Bresch, the daughter of Sen. Joe Manchin (D-W.Va.).
“There is huge pressure here, and I hope they bring the price down with school starting,” Klobuchar said.
In any case, she also wants to determine if “systemic changes” in drug pricing policies are needed.
Mylan declined to say if it was considering lowering the price of EpiPens. In reaction to media reports of price increases and the concerns of Klobuchar and others, the company offered a lengthy explanation on its website to show that the product is affordable.
Among other things, Mylan said that in 2015 nearly 80 percent of “commercially insured patients” using a company-issued savings coupon got EpiPens “for $0.” The company also touted an “EpiPen4Schools initiative” that it said has distributed more than 700,000 free EpiPens since 2012.
The growing criticism of Mylan’s pricing caught Wall Street’s attention Tuesday, sending the company’s shares down nearly 5 percent and slicing its market value by more than $1.2 billion.
“Some families don’t have insurance,” Klobuchar said. “They have to pay the whole amount. Other families have really high deductibles. So they are essentially paying the whole amount because the copay doesn’t hit yet ... insurance companies are paying it or the government is paying for it through Medicare or Medicaid. Someone is paying this cost.”
As ranking member of the antitrust subcommittee of the Senate Judiciary Committee, Klobuchar said an examination of pricing is warranted.
“Just the fact that they have monopoly power and they increase the price is not enough to say that’s illegal,” she explained. Antitrust laws are triggered if a company uses its market control to limit the trade of competitors. “So that’s what we’ll look at.”
In addition to the FTC investigation, Klobuchar called for a Judiciary Committee hearing on EpiPen pricing that she hopes can produce the impetus needed to pass four bipartisan bills that she has co-sponsored. The legislation is meant to lower drug prices by increasing competition for all kinds of pharmaceuticals. The pharmaceutical lobby opposes all four bills.
One bill allows Medicare to negotiate drug prices with pharmaceutical companies. A second allows reimportation of U.S.-made drugs from Canada, where drug prices are significantly lower than the U.S. For instance, in Canada EpiPens cost less than half of what they cost in the U.S., Klobuchar’s staff said.
The other two pieces of legislation address generic drugs. One forbids makers of brand name drugs from paying to delay introduction of generics. The second speeds up the generic drug approval process.
The issue of drug pricing pushes a hot button. Klobuchar’s Facebook posting about EpiPens quickly drew 5,000 shares. People with tales of EpiPen pricing continue to contact her office.
“At my State Fair booth I’m going to collect more stories,” Klobuchar said. “You have to get the real world experiences of people to make the case.