You’ve probably seen the news recently about EpiPen’s very public “shaming” over what many consumers believe to be unethical price increases on its life-saving epinephrine injections. People with severe allergies, including a lot of children, rely on EpiPens when they have an allergic reaction. Schools across the country stock the pens just in case something happens, and worried parents make sure they have a couple on hand at all times.
What people are so upset about is the fact that EpiPen has increased its price significantly over the past few years, from about $50 per shot in 2007 to more than $300 per shot today according to Bloomberg. In 2012, EpiPen’s parent company Mylan started selling the epinephrine auto-injector only in two-packs (even though they expire after one year), doubling the price consumers must pay at the pharmacy.
Though the price of EpiPens has risen significantly faster than inflation for the past few years, there’s no evidence that the product has become more difficult or costly to make; greed appears to be the driving factor behind the price increases.
The good news is that the bad publicity both in the press and on social media has forced the company to take some drastic measures: Mylan recently announced that it will offer coupons to people who don’t have health insurance or who have to pay a large deductible before their insurance kicks in, and more recently the company said it will soon introduce a generic version of its own brand-name drug.
So why would the EpiPen pricing battle make our lives more difficult? Because it’s being fought publicly and has drawn attention to something that many consumers have been oblivious to for a long time: the true cost of healthcare.
In an attempt to explain the unpopular price increases, Mylan CEO Heather Bresch has blamed a lack of transparency in the healthcare system – and she’s right. When people are shielded from the true cost of medical procedures and prescription drugs by low-dollar copayments, they don’t know or care what the price is, and this tends to drive prices up over time.
Many of today’s health plans, though, don’t have those up-front copayments, and that means that more and more people will be exposed to the true cost of their medication. With EpiPen drawing attention to the high cost of prescription drugs, consumers are likely to start asking about the price of other medications, and they’ll expect their agents to have an answer.
Don’t get us wrong – when consumers get more involved in their health care decisions and start asking how much prescriptions cost, that’s a good thing. It shows that health care consumerism could actually be working. The problem for brokers is that we haven’t historically provided this sort of data to our clients and may not even know what types of transparency tools are available. We need to learn quickly, though, because in 2017 there will be a greater demand for both information and alternatives.