The Illinois EpiPen law isn't 'huge' like the headlines are claiming

The Illinois EpiPen law isn't 'huge' like the headlines are claiming
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Headlines proclaimed, “Illinois just became the first state to require insurance companies to cover EpiPen injectors for kids.” This followed an Aug. 14 tweet from Governor J.B. Pritzker: “I was proud to sign … laws expanding insurance coverage for children whose allergies require lifesaving EpiPens ...”

The EpiPen is an injection device that contains epinephrine, also known as adrenaline, a natural mammalian hormone that plays a central role in our “fight or flight” response to danger. During a severe allergic reaction epinephrine immediately reduces swelling of the face, lip  and throat, which can be lifesaving. 

EpiPen has received bad news coverage in recent years. This is not because of concerns about its efficacy, but rather alarm and anger about its price. After manufacturer Mylan bought the right to produce EpiPen from a German drug maker in 2009, the company, in tandem with another branded competitor, progressively raised the list price from $124 dollars for a two-pack to about $650 today. 

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The drugs are likely sold to insurers at significant discounts — the company claimed in 2016 to receive only $275 as compared with a list price of $608. 

But to the extent discounts come in the form of rebates, customers may not see them other than in slightly reduced premiums. For those with significant co-payments or high deductible insurance, costs can be substantial. Even worse, if you don’t have insurance you could end up paying list price.  

The Illinois announcement received much acclaim. According to USA Today, “Illinois became the first state to shift the burden of paying for a potentially life-saving shot of an epinephrine injection for children from parents to insurance companies.” One parent tweeted: "As a parent whose kid needs an epipen (which "expires" every six months) at school, camp, and grandmas, this is huge.”

As a physician, the hoopla seemed strange. What insurance company would not already cover a lifesaving, standard-of-care medicine like epinephrine? Wouldn’t the company risk significant liability if somebody died as a result? How would insurers survive the adverse publicity? Perhaps that was why, after 30 years on the market no other states mandate coverage of epinephrine injections?

I decided to investigate. The statute reads: “A group or individual policy of accident and health insurance or a managed care plan … shall provide coverage for medically necessary epinephrine injectors for persons 18 years of age or under.” It defines an “epinephrine injector” as “an auto-injector approved by the United States Food and Drug Administration.” The new law does not mandate coverage of the “EpiPen” at all. Rather, it requires coverage of EpiPen or one of the five alternative epinephrine injector products, including a generic version from Mylan and one from Teva Pharmaceuticals that was approved last August. 

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But what about patient co-payments, deductibles, or other out-of-pocket costs? Not mentioned. Nor does the law limit prices manufacturers can charge. This contrasts with Illinois’ mandate for coverage of mammograms, which must be provided “at no cost to the insured” without application to “an annual or lifetime maximum benefit.”

I read many articles about the Illinois law. Only the Chicago Tribune appeared to recognize the paradox. Lisa Schencker wrote: “Still it’s unclear how much of a difference the measure will make. Many insurers already cover prescribed epinephrine auto-injectors. Coverage also doesn’t guarantee reasonable costs for consumers. 

An insurance plan might cover the device but still require a consumer to pay hundreds of dollars out-of-pocket for it because the consumer hasn’t met an annual deductible. Or consumers may face varying co-pays for the devices …”

A visit to the discount prescription shopping site GoodRx suggests all is not lost. Major pharmacies provide epinephrine at much lower costs. With coupons, a package of 2 EpiPen’s at lowest priced Walmart sells for $123.64. At CVS and Target generic Adrenaclick — a competing product — is $109.99. For some people, it may be cheaper to pay cash than use insurance. Bottom line, it pays to shop.

There have been shortages of some versions of epinephrine injectors like EpiPen and its Mylan-produced generic. Maybe the new law will end up requiring insurers to pay for additional epinephrine sources during shortages — if there are any that do not already do so.

Still, this legislation was greeted to great fanfare based on 140 characters. However, it does not do what the headlines say it does. Instead, it looks like a “huge” "nothing burger." It is not clear whether it does anything at all.

Roger D. Klein J.D. M.D., is a member of the Regulatory Transparency Project on health care. He is a former adviser to the FDA and HHS. Roger graduated from Yale Law School and completed his post-graduate medical training at Yale Medical School.Dr. Roger D. Klein is a member of the Regulatory Transparency Project on health care. He is a former adviser to the FDA and HHS. Dr. Klein graduated from Yale Law School and completed his post-graduate medical training at Yale Medical School.