Bill would up penalty on EpiPen makers for flouting Colorado price cap

A bill in the Colorado legislature would allow stiffer penalties for EpiPen and insulin manufacturers who refuse to sell their products under the state’s price caps, which one generic drugmaker is challenging in court.

Over the last three years, Colorado set limits on out-of-pocket costs for insulin and epinephrine auto-injectors. So far, insulin makers largely complied with the laws, but that hasn’t been the case with some companies that make EpiPens and generic auto-injectors, said Sen. Dylan Roberts, a Frisco Democrat who sponsored both of the original bills.

While lawmakers expected some confusion after the epinephrine law took effect in January, it appears manufacturers won’t comply without a bigger stick, he said.

“This is a bill we wish we didn’t have to do,” he said.

Epinephrine, also known as adrenaline, keeps a person’s blood pressure from dropping too far and their throat from closing up because of a severe allergic reaction. People who have allergies to certain foods or insect stings have to carry epinephrine in case of accidental exposure. Most use pre-loaded auto-injectors, so they won’t have to measure the correct dose during an emergency.

The state’s affordability program, which took effect in January, capped the out-of-pocket costs for a two-pack of epinephrine auto-injectors at $60. A separate measure, which limited how much insurance companies can set as the out-of-pocket cost for epinephrine, has rolled out smoothly, with most complaints coming from people who didn’t know that their insurance didn’t fall under the cap, according to the Colorado Division of Insurance.

The affordability program has proved to be more challenging. In theory, Colorado residents with an epinephrine prescription only have to fill out an application and pay $60 out of pocket, but some pharmacists say they can’t sell at that price because the auto-injector manufacturers either won’t reimburse them the cost of the auto-injectors or send them a replacement set, as the law requires. One manufacturer, Viatris, is complying, while generic drugmaker Teva has sued to end the program.

House Bill 24-1438 would allow the attorney general to pursue manufacturers under the Colorado Consumer Protection Act if they don’t reimburse pharmacies or replace the product. Current law allows a fine of up to $10,000 per month, but giving that authority to the attorney general would allow for higher penalties, Roberts said.

“The idea of raising it is to send a message,” he said.

Teva, which sells generic epinephrine auto-injectors for about $300 for a two-pack, has sued the state in federal court, arguing that Colorado’s affordability program essentially took private property for public use.

“In the absence of the reimburse-or-resupply requirement, Teva obviously would not provide Colorado pharmacies with free replacement auto-injectors or reimburse the pharmacies for the auto-injectors’ cost. And there is a ‘credible threat’ of prosecution for noncompliance because the statute authorizes the Pharmacy Board to impose monthly $10,000 fines,” the lawsuit said.

The attorney general’s office said that Teva hadn’t shown any actual losses at this point, and that the public interest in preventing severe allergic reactions outweighed Teva’s arguments.

“Price gouging by certain epinephrine auto-injector manufacturers should not prevent certain at-risk Coloradans from obtaining access to this life-saving medication,” attorneys in the AG’s office wrote in a motion asking a federal court to throw out Teva’s lawsuit. “As a matter of fundamental fairness and justice, manufacturers may be forced to play their part in alleviating the affordability crisis of their own making.”

The federal court allowed Teva’s suit to continue, but the attorney general is appealing that ruling.