How much is a potentially lifesaving medicine worth? The question is easy to answer for number-crunching drug company CEOs: as much as they can get away with charging.
But for people depend on the drugs to survive, the answer is more difficult. Patients struggle with ever-rising health care bills and insurance premiums while lawmakers have failed for years to reel in costs.
The latest outrage over the astronomically high prices that Americans fork out for health care is centered on the EpiPen, the screwdriver-handle-sized injection device used to stave off the effects of severe allergic reactions to certain foods and insect stings.
The injector, which millions of Americans depend on, was invented in the 1970s by engineer Sheldon Kaplan, who died seven years ago in modest surroundings amid obscurity. But Kaplan’s patent made its way into to Netherlands-based drugmaker Mylan, which since 2007 has jacked up the price of the spring-loaded injector from $57 a shot to $300. Mylan’s price hikes recently raised the ire of Democratic presidential candidate Hillary Clinton, and last week New York Attorney General Eric T. Schneiderman launched an investigation into Mylan’s “potentially anticompetitive” sales contract with school systems.
The high price also caught the attention of Dr. Douglas McMahon. The 38-year-old allergy specialist in St. Paul, Minnesota, has been thinking about how to improve on the EpiPen and to do so in a way that’s affordable. Inspired to practice his specialty by his own food allergy — which as a child kept him out of sports and from visits to friend’s homes — McMahon saw that the EpiPen device was not only overpriced for what it does but also was too big to be easily carried in a pocket. For the past couple of years, he has been tinkering with injection-device components in his lab. And the result of his work is AllergyStop, an injection prototype that’s small enough to fit on a key chain. McMahon claimed his device is as effective as the EpiPen and can be marketed and sold for about $50.
But even though McMahon’s device has been production ready for the past two months, the steps he must take to get the device approved will cost him about $2 million and it will potentially take him years to go through all the hurdles required by the U.S. Food and Drug Administration for possible approval of his invention . McMahon spoke to Salon about his invention and his experience trying to deliver it to the market.
Is anyone currently using the AllergyStop injector?
My device is completely functional. It’s safe. I use it. But I don’t use it in my practice. To do all the tests the FDA requires, and to wade through the process, it’s going to be a couple of years.
What makes your injection device different from the existing options?
It’s very compact. It fits on a key chain. But to make it so compact, the needle is not attached to the device. So the patient does have to put the needle on with a little twist. It’s an extra step, but we’ve timed patients on it and it’s still very fast.
I think the cost of the device and the size will encourage more people to carry it. Studies by and far show that people hardly ever carry their injectors with them all the time.
It sounds like a pretty straightforward invention. What have been the challenges to bringing it to market?
It’s been a tough process. At night I’m talking to businesspeople about trying to get funding. In the early mornings I’m talking to FDA advisers.
It’s a big problem in medicine right now. People say all these costs are so high, and I can kind of see why. I have a unique perspective of being a physician taking a device through the market and seeing this long, tedious process. I know there needs to be steps and regulations, but it seems like it’s a little too much.
Where are you in this process right now?
We have a patent pending. We have all of our plans in step and we’re in the process of lining up a manufacturing company. We’re currently going through the bids.
The next step is to have the manufacturer fill the device with the medicine and then have it sit there. We need to run tests to make sure the medicine stays potent and sterile over time.
Once it all looks stable, we submit [our prototype] to the FDA. We’re going to be able to do an abbreviated process, but it will still take months to go through it. We also need to arrange the funding.
Let’s talk a bit about the high cost of health care in the U.S., where patients pay the world’s highest prices. As a doctor and inventor trying to bring a device to the marketplace, how do think we should solve this price problem?
Allow competitors to get into the market faster. Obviously if someone invents something and patents it, you want them to have some rights. But I think the FDA process and the regulations are very stringent.
We’re not 100 percent certain, but we were told by an FDA adviser that the outer case of our device, which never touches the medicine – it’s just a protective case – that it needs FDA approval. And we’re thinking, why in the heck does something like that need FDA approval? It’s just a lot of regulatory steps.
Do you think these regulatory hurdles are there purely to ensure patient safety? Or is there something else at play aimed at protecting big companies with lucrative patents from competition?
I wonder about that. Other people have tried to get into the epinephrine [injector] market and they don’t. And you wonder, Why not, what’s going on? I don’t have proof of any shady things going on, but you do kind of wonder why there haven’t been more people able to come into the market with more affordable alternatives.
The EpiPen two-pack costs $600 in the U.S. and $85 in France. And this is true about a lot of drugs and medical devices, which wind up costing more in the U.S. than elsewhere. Are American consumers getting gouged so that companies can offset the lower profit margins they make elsewhere?
I wouldn’t doubt it. Some of it is because the U.S. has more stringent regulations, which would add to the cost. But yeah I think we are helping other countries keep their costs lower. And other countries don’t have the health insurance issues we have.
Is there anything else an average person should know about your experience in trying to bring down the price of a lifesaving device?
A lot of people don’t realize the cost and time it takes. We were ready to basically launch our device a couple of months ago, but we were told we had to do our own tests, like how the medicine handles temperature changes, that others have already done.