Senate Joint Resolution No. 29

Introduced by Senator Hernandez

(Coauthors: Senators Hall and Leno)

August 29, 2016

Senate Joint Resolution No. 29—Relative to EpiPen.

LEGISLATIVE COUNSEL’S DIGEST

SJR 29, as introduced, Hernandez. EpiPen: pricing.

This measure would urge the United States Food and Drug Administration to reconsider its denial of approval for generic alternatives to the epinephrine auto-injector EpiPen, would urge the Congress of the United States to investigate the impact that Mylan NV’s monopoly has had on price increases for EpiPen, and would urge the Congress and the President of the United States to take action to limit the unrestrained ability of drug manufacturers to increase prices based on what the market can bear.

Fiscal committee: no.

WHEREAS, Millions benefit from life-saving drugs and devices,
including Americans with allergies that can be treated by
epinephrine; and

WHEREAS, Last year, doctors wrote 3.6 million prescriptions
for EpiPen, which stops allergic reactions by quickly and safely
injecting epinephrine; and

WHEREAS, In 2007 Mylan NV purchased the rights to EpiPen
and immediately began raising its price. In 2008 and 2009, Mylan
raised the price by 5 percent, and at the end of 2009 it raised the
price by another 19 percent. From 2010 to 2013, Mylan imposed
a series of 10-percent price hikes. And from the fourth quarter of
2013 to the second quarter of 2016, Mylan raised EpiPen prices
15 percent every other quarter; and

WHEREAS, A pack of two EpiPen devices now has a list price
of over $600, an increase of 548 percent since Mylan began selling
the drug, according to Truven Health Analytics; and

WHEREAS, The formula of EpiPen did not change, and it is
no more effective in protecting against allergic reactions in 2016
than it was in 2007; and

WHEREAS, During the same time, Mylan began an aggressive
marketing and lobbying effort to increase demand for EpiPen,
which included the passage of federal and state legislation. The
United States Congress passed the School Access to Emergency
Epinephrine Act in 2013 to provide an incentive to states to boost
the stockpile of epinephrine at schools. A number of states,
including California, passed laws requiring public schools to have
epinephrine. In 2010, the United States Food and Drug
Administration (FDA) changed its recommendations so that two
EpiPen devices be sold in a package instead of one and that they
be prescribed for at-risk patients, not just those with confirmed
allergies; and

WHEREAS, The rising cost of EpiPen has implications for
taxpayers. Over half of California’s children are insured through
Medi-Cal, therefore the taxpayers are paying a large share of the
cost of this medication; and

WHEREAS, Mylan has an effective monopoly that it is using
to maximize profit because there is no equivalent generic
competitor; and

WHEREAS, Patients who have to pay retail prices are being
forced to buy EpiPen abroad, where it is cheaper, and are resorting
to other devices that deliver epinephrine, including do-it-yourself
syringes; and

WHEREAS, Even some ambulance providers in California have
stopped the use of EpiPen to treat allergic shock and instead are
drawing from a vial and injecting epinephrine by syringe. First
responders in Seattle have developed such a kit and have sold them
to public health agencies in five other states. There is a
demonstration project in New York called “Check and Inject New
York” that trains first responders to use syringe epinephrine kits
in place of EpiPen to save money; and

WHEREAS, After recent widespread criticism, Mylan said it
would expand access and increase benefits to programs that it uses
to help consumers pay less, but those changes do not alter the
prices that insurers and employers pay. Those institutions will still
face the brunt of the impact from the price hikes; and

WHEREAS, Offering co-payment assistance and free product
to consumers is part of the standard playbook for manufacturers
of expensive drugs. Efforts by drug makers to shield consumers
from the out-of-pocket costs associated with the rapidly increasing
cost of their medications ignores the fact that insurance companies
bear the brunt of these unreasonable price increases, which results
in higher premiums for all consumers; now, therefore, be it

Resolved by the Senate and the Assembly of the State of
California, jointly, That the Legislature declares unnecessary and
unexplained increases in pharmaceutical pricing is a harm to our
health care system that will no longer be tolerated because the
system cannot sustain it; and be it further

Resolved, That the Legislature urges the United States Food and
Drug Administration to reconsider its denial of approval for generic
alternatives to EpiPen; and be it further

Resolved, That the Legislature urges the Congress of the United
States to investigate the impact that Mylan’s monopoly has had
on the price hikes for EpiPen; and be it further

Resolved, That the Legislature urges the Congress and President
of the United States to take action to limit the unrestrained ability
of drug manufacturers to increase prices based only on what the
market can bear rather than on providing a fair return on
investment; and be it further

Resolved, That the Secretary of the Senate transmit copies of
this resolution to the President and Vice President of the United
States, to the Speaker of the House of Representatives, to the
Majority Leader of the Senate, to each Senator and Representative
from California in the Congress of the United States, to the
Secretary of the United States Department of Health and Human
Services, and to the Commissioner of Food and Drugs, and to the
author for appropriate distribution.