BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SJR 29|
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THIRD READING
Bill No: SJR 29
Author: Hernandez (D), et al.
Introduced:8/29/16
Vote: 21
SUBJECT: EpiPen: pricing
SOURCE: Author
DIGEST: This resolution makes various legislative findings
related to the increase in the price of the EpiPen by the
pharmaceutical manufacturer Mylan, urges the federal Food and
Drug Administration to reconsider its denial of generic
alternatives to EpiPen, and urges Congress to investigate the
impact that Mylan's monopoly has had on the price hikes for
EpiPen and to take action to limit the unrestrained ability of
drug manufacturers to increase prices based only on what the
market will bear.
ANALYSIS: Existing law requires school districts, county
offices of education (COE), and charter schools to provide
emergency epinephrine auto-injectors (EAIs) to school nurses or
trained personnel who have volunteered, as specified.
Additionally, it authorizes school nurses or trained personnel
to use the EAIs to provide emergency medical aid to persons
suffering, or reasonably believed to be suffering, from an
anaphylactic reaction.
This resolution:
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1)Makes the following legislative findings:
a) Millions benefit from life-saving drugs and devices,
including Americans with allergies that can be treated by
epinephrine;
b) Last year, doctors wrote 3.6 million prescriptions for
EpiPen, which stops allergic reactions by quickly and
safely injecting epinephrine;
c) 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%, and at the end of 2009 it
raised the price by another 19%. From 2010 to 2013, Mylan
imposed a series of 10% price hikes. And from the fourth
quarter of 2013 to the second quarter of 2016, Mylan raised
EpiPen prices 15% every other quarter;
d) A pack of two EpiPen devices now has a list price of
over $600, an increase of 548% since Mylan began selling
the drug, according to Truven Health Analytics;
e) 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;
f) 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
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devices be sold in a package instead of one and that they
be prescribed for at-risk patients, not just those with
confirmed allergies;
g) 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;
h) Mylan has an effective monopoly that it is using to
maximize profit because there is no equivalent generic
competitor;
i) 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;
j) 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;
aa) 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,
bb) 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
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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.
2)Declares that 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.
3)Urges:
a) The FDA to reconsider its denial of approval for generic
alternatives to EpiPen;
b) The Congress of the United States to investigate the
impact that Mylan's monopoly has had on the price hikes for
EpiPen; and,
c) 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.
Comments
Author's statement. During the same time that Mylan was
steadily increasing the price of EpiPens to reach over 500% of
its list price in 2007, the company began a marketing and
lobbying effort to increase demand for this product, which
included the passage of federal and state legislation. In 2010,
the FDA changed its recommendations so that two EpiPens be sold
in a package instead of one and that they be prescribed for
at-risk patients, not just those with allergies. In 2013,
Congress passed the School Access to Emergency Epinephrine Act
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to provide an incentive to states to boost the supply of
epinephrine at schools. Following this, a number of states,
including California, passed laws requiring public schools to
have epinephrine. Mylan has an effective monopoly that it is
using to maximize profit because there is no equivalent generic
competitor. In California, over half of our children are
insured through Medi-Cal, therefore the public ends up paying a
large share of the cost of the drug. After recent widespread
criticism, Mylan announced that 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,
employers, emergency responders, and schools pay. Those
institutions will still face the brunt of the impact from the
price hikes. Offering co-payment assistance and free product to
consumers is part of the standard playbook for drug companies.
Efforts by drug makers to shield consumers from the
out-of-pocket costs associated with the rapidly increasing cost
of their medication ignores the fact that insurance companies
bear the brunt of these unreasonable price increases and results
in higher premiums for all consumers. The drug maker Mylan is
taking advantage of its monopoly and exploiting a life-saving
medication that countless families across California and the
nation rely on. Something must be done now to correct the market
for this particular drug. The federal Administration and
Congress have the power to limit the unrestrained ability of
Mylan to gouge our health care system, and they should use it.
Anaphylaxis. According to the National Institutes of Health,
anaphylaxis is a severe, whole-body allergic reaction to a
chemical that has become an allergen. After being exposed to a
substance, such as bee sting venom, the person's immune system
becomes sensitized to it. When the person is exposed to that
allergen again, an allergic reaction may occur. Anaphylaxis
happens quickly after the exposure, is severe, and involves the
whole body. Tissues in different parts of the body release
histamine and other substances. This causes the airways to
tighten and leads to other symptoms. Some drugs (such as
morphine, x-ray dye, and aspirin) may cause an anaphylactic-like
reaction when people are first exposed to them. These reactions
are not the same as the immune system response that occurs with
true anaphylaxis. However, the symptoms, risk for complications,
and treatment are the same for both types of reactions. Risks
include a history of any type of allergic reaction.
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Epinephrine auto-injector. An EAI is a medical device used to
deliver a measured dose of epinephrine using auto-injector
technology, most frequently for the treatment of acute allergic
reactions to avoid or treat the onset of anaphylaxis. According
to the Food Allergy Research and Education Web site, epinephrine
is a highly effective medication that can reverse severe
symptoms of anaphylaxis but must be administered promptly to be
most effective. EpiPen and EpiPen Jr. (the version for smaller
children) are commonly used EAIs. According to Mylan, which
makes the two products, EpiPen contains 0.3mg of epinephrine and
is intended for those who weigh 66 pounds or more, while EpiPen
Jr. contains 0.15mg and is intended for patients weighing
between 33 to 66 pounds. Mylan's product information states that
it is not known if EpiPen and EpiPen Jr. are safe and effective
in children who weigh less than 33 pounds. The devices are
intended to be injected into the middle of the outer thigh, and
patients are directed not to inject the device into a vein,
buttock, fingers, toes, hands, or feet.
EpiPens and generic alternatives. Epinephrine on its own is
extremely cheap, just a few cents per dose. The auto-injecting
device is the product that is protected under patent in this
case. Mylan "owns" the EpiPen auto-injector device design, so
competitors must find work-arounds in their devices to deliver
the epinephrine into the patient's body. This task has proven to
be difficult for EpiPen competitors. In 2015, Sanofi US issued a
voluntary nationwide recall of its Auvi-Q due to potential
inaccurate dosage delivery. In 2016, the FDA rejected Teva
Pharmaceutical's generic epinephrine injector because it had
reliability issues and therefore wasn't medically equivalent.
Another company, Twinject, also discontinued their injectors in
2012. A generic product called Adrenaclick is on the market,
but is not very popular and is not always covered by insurers.
On August 29, 2016, Mylan announced it would offer the first
generic to the EpiPen for $300, a 50% discount from the brand
price.
Congressional action. Several different letters from the United
States Congress have been sent to the Chief Executive Officer of
Mylan in the past two weeks, following the most recent increase
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to the price of EpiPen. These letters include one from the
House of Representative's Committee on Oversight and Government
Reform, signed by the chair as well as the ranking member; a
letter signed by 20 Democratic members of the U.S. Senate; and,
a letter from Senator Charles Grassley, Chairman of the
Committee on the Judiciary. The letter from the House Committee
on Oversight and Government Reform requested a number of
documents from Mylan, including documents relating to the
company's gross and net revenues from the sales of the EpiPen
since its acquisition, documents relating to the company's
expenses from the manufacture and sale of the EpiPen, and any
cost estimates, profit projections, or other anlayses relating
to the company's current and future sales of the EpiPen. Senator
Grassley's letter requested that Mylan explain the changes it
has made to EpiPen since the acquisition that have caused it to
increase the price, any analyses conducted by Mylan in
determining the price of EpiPens, and Mylan's advertising budget
for the product. The letter signed by the Democratic members of
the U.S. Senate requested answers to a number of questions,
including the number of consumers who have used certain consumer
savings assistance programs offered by Mylan, and how Mylan
justifies charging $600 for the branded product when it claims
that the new generic alternative it will offer at $300 will be
identical to the brand name version.
Related/Prior Legislation
AB 1386 (Low, 2016) permits a health care provider to issue a
prescription for, and a pharmacy to dispense, an EAI to an
authorized entity, which is defined as any entity or
organization that employs at least one person that has completed
an approved training course on the emergency use of EAIs. Also,
revises the definition of "epinephrine auto-injector" to
eliminate the reference to a spring-activated needle, and
instead defines this term as a "disposable delivery device
designed for automatic injection of a premeasured dose of
epinephrine into the human body to prevent or treat a
life-threatening allergic reaction. AB 1386 has been passed by
the Legislature, and is pending action by the Governor.
SB 1266 (Huff, Chapter 321, Statutes of 2014) required school
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districts, COE, and charter schools provide emergency EAIs to
school nurses or trained personnel who have volunteered, as
specified. Additionally, it authorized school nurses or trained
personnel to use the EAIs to provide emergency medical aid to
persons suffering, or reasonably believed to be suffering, from
an anaphylactic reaction.
SB 669 (Huff, Chapter 725, Statutes of 2013) permitted a
prehospital emergency medical care person or lay rescuer to
obtain and use an EAI in emergency situations with certification
of training, as specified.
SB 1069 (Pavley, Chapter 512, Statutes of 2010), in addition to
expanding the scope of practice for physician assistants in
other instances, added physician assistants, in addition to
physician and surgeons, from whom a school pupil must obtain a
written statement in order to carry and self-administer a
prescription EAI.
SB 1912 (Ashburn, Chapter 846, Statutes of 2004) permitted
pupils to carry and self-administer inhaled asthma medication or
an EAI at school, as specified.
AB 559 (Wiggins, Chapter 458, Statutes of 2001) was identical to
AB 1791 (see below).
AB 1791 (Wiggins, 2000) would have established provisions of law
that permit a school district or COE to provide emergency EAIs
to trained personnel, and permit trained personnel to utilize
these EAIs to provide emergency medical aid to persons suffering
from an anaphylactic reaction at a school or during a school
activity. The bill was vetoed by Governor Davis who stated that
the shortage of school nurses with the knowledge necessary to
administer medications would assure that the bulk of school
personnel administering epinephrine in emergencies would be lay
personnel. The Governor further stated that lay persons cannot
receive the necessary background in a limited training program
that would provide the essential medical judgment skills
required to administer medication in an emergency situation.
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FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified8/30/16)
Amalgamated Transit Union
American Federation of State, County and Municipal Employees
Anthem Blue Cross
Association of California Life and Health Insurance Companies
Blue Shield of California
California Association of Health Plans
California Health+ Advocates
California Labor Federation
California Professional Firefighters
California School Employees Association, AFL-CIO
California Teamsters Public Affairs Council
Cigna
Consumers Union
Health Access California
International Association of Machinists and Aerospace Workers
International Federation of Professional & Technical Engineers
International Longshore and Warehouse Union
Jockey's Guild
Kaiser Permanente
Screen Actors GuildAmerican Federation of Television and Radio
Artists
Service Employees International Union California
UNITE HERE!
United Health Care Professionals
United Nurses Association of California
Utility Workers Union of America AFL-CIO
OPPOSITION: (Verified8/30/16)
None received
Prepared by:Melanie Moreno / HEALTH /
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8/30/16 17:57:55
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