Julie Appleby

Consumers coping with the high cost of health insurance are the target market for new plans claiming to be lower-cost alternatives to the Affordable Care Act that fulfill the law’s requirement for health coverage.

But experts and regulators warn consumers to be cautious – and are raising red flags about one set of limited benefit plans marketed to individuals for as little as $93 a month. Offered through brokers and online ads, the plans promise to be an “ACA compliant, affordable, integrated solution that help ... individuals avoid the penalties under [the health care law].”

Such skinny plans – sold for the first time to individuals – come amid uncertainty over the fate of the ACA and whether the Trump administration will ease rules on plans for individuals. Dozens of brokers are offering the plans.

“The Trump administration is injecting a significant amount of confusion into the implementation of the ACA,” said Kevin Lucia, project director at Georgetown University’s Health Policy Institute. “So it doesn’t surprise me that we would have arrangements popping up that might be trying to take advantage of that confusion.”

Apex Management Group of the Chicago area and Pennsylvania-based Xpress Healthcare have teamed up to offer the plans, and executives from both companies say they don’t need approval from state regulators to sell them. They are selling the policies across the country, although their websites note one state – Massachusetts – where the plans are not offered.

David Shull, Apex’s director of business development, said “this is not insurance” and the plans are designed to meet the “bulk of someone’s day-to-day needs.”

Legal and policy experts have raised concerns that the new plans could leave buyers incorrectly thinking they are exempt from paying a penalty for not having coverage. Additionally, they say, plans sold to individuals must be state-licensed – and one regulator has already asked for an investigation.

“Generally speaking, any entity selling health insurance in the state of California has to have a license,” Dave Jones, the Golden State’s insurance commissioner, said earlier this month. “I have asked the Department of Insurance staff to open an investigation with regard to this company to ascertain whether it is in violation of California law if they are selling it in California.”

Asked about a possible investigation, Apex owner Jeffrey Bemoras emailed a statement last week saying the firm is not offering plans to individuals in California. He also noted that the individual market accounts for only 2% of the company’s business.

“To be clear, Apex Management group adheres closely to all state and federal rules and regulations surrounding offering a self-insured MEC [minimal essential coverage] program,” he wrote. “We are test marketing our product in the individual environment. If at some point it doesn’t make sense to continue that investment we will not invest or focus in on that market.”

Price-tag appeal, but what about coverage?

The new plans promise to be a solution for individuals who say that conventional health insurance is too expensive. Those looking for alternatives to the ACA often earn too much to qualify for tax subsidies under the federal law.

Donna Harper, an insurance agent who runs a two-person brokerage in Crystal Lake, Ill., found herself in that situation. She sells the Xpress plans – and decided to buy one herself.

Ms. Harper says she canceled her BlueCross BlueShield plan, which did meet the ACA’s requirements, after it rose to nearly $11,000 in premiums this year, with a $6,000 annual deductible.

“Self-employed people are being priced out of the market,” she said, noting the new Xpress plan will save her more than $500 a month.

The Xpress Minimum Essential Coverage plans come in three levels, costing as little as $93 a month for individuals to as much as $516 for a family. They cover preventive care – including certain cancer screenings and vaccinations – while providing limited benefits for doctor visits, lab tests, and lower-cost prescription drugs.

There is little or no coverage for hospital, emergency room care, and expensive prescription drugs, such as chemotherapy.

Ms. Harper said she generally recommends that her clients who sign up for an Xpress plan also buy a hospital-only policy offered by other insurers. That extra policy would pay a set amount toward inpatient care – often ranging from $1,500 to $5,000 or so a day.

Still, experts caution that hospital bills are generally much higher than those amounts. A three-day stay averages $30,000, according to the federal government’s insurance website. And hospital plans can have tougher requirements. Unlike the Xpress programs, which don’t reject applicants who have preexisting medical conditions, hospital-only plans often do. Ms. Harper says she personally was rejected for one.

“I haven’t been in the hospital for 40 years, so I’m going to roll the dice,” she said. And if she winds up in the hospital? “I’ll just pay the bill.”

About 100 brokers nationwide are selling the plans, and interest “is picking up quick,” said Edward Pettola, co-owner and founder of Xpress, which for years has sold programs that offer discounts on dental, vision, and prescription services.

Caveat emptor

Experts question whether the plans exempt policyholders from the ACA’s tax penalty for not having “qualified” coverage, defined as a policy from an employer, a government program or a licensed product purchased on the individual market.

The penalty for tax year 2017 is the greater of a flat fee or a percentage of income. The annual total could range from as little as $695 for an individual to as much as $3,264 for a family.

President Trump issued an executive order in October designed to loosen insurance restrictions on lower-cost, alternative forms of coverage, but the administration has not signaled its view on what would be deemed qualified coverage.

Responding to questions from KHN, officials from Apex and Xpress said their plans are designed to be affordable, not to mimic ACA health plans.

“If that is what we are expected to do, just deliver what every Marketplace plan or carriers do, provide a Bronze, Silver Plan, etc., it would not solve the problem in addressing a benefit plan that is affordable,” the companies said in a joint email on Nov. 14. “Individuals are not required to have an insurance plan, but a plan that meets minimum essential coverage, the required preventive care services.”

Mr. Bemoras, in a separate interview, said his company has been selling a version of the plan to employers since 2015.

“As we see the political environment moving and wavering and not understanding what needs to be done, the individual market became extremely attractive to us,” Mr. Bemoras said.

Still, experts who reviewed the plans for KHN said policies sold to individuals must cover 10 broad categories of health care to qualify as ACA-compliant, including hospitalization and emergency room care, and cannot set annual or lifetime limits.

The Xpress/Apex programs do set limits, paying zero to $2,500 annually toward hospital care. Doctor visits are covered for a $20 copayment, but coverage is limited to three per year. Lab tests are limited to 5 services annually. To get those prices, patients have to use a physician or facility in the PHCS network, which says it has 900,000 providers nationwide. Low-cost generics are covered for as little as a $1 copay, but the amount patients pay rises sharply for more expensive drugs.

“I’m very skeptical,” said attorney Alden J. Bianchi of Mintz Levin, who advises firms on employee benefits. “That would be hard [to do] because in the individual market, you have to cover all the essential health benefits.”

The details can be confusing, partly because federal law allows group health plans – generally those offered by large employers – to provide workers with self-funded, minimal coverage plans like those offered by Apex, Mr. Bianchi said.

Apex’s Mr. Shull recently said in an email that the firm simply wants to offer coverage to people who otherwise could not afford an ACA plan.

“There will be states that want to halt this. Why, I do not understand,” he wrote. “Would an individual be better off going without anything? If they need prescriptions, lab or imaging services subject to a small copay, would you want to be the one to deny them?”

Some consumers might find the price attractive, but also find themselves vulnerable to unexpected costs, including the tax liability.

Ms. Harper, the broker who signed up for one of the plans, remains confident: “As long as Xpress satisfies the [mandate], which I’m told it does, my clients are in good hands. Even if it doesn’t, I don’t think it’s a big deal. You are saving that [the tax penalty amount] a month.”

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

Consumers coping with the high cost of health insurance are the target market for new plans claiming to be lower-cost alternatives to the Affordable Care Act that fulfill the law’s requirement for health coverage.

But experts and regulators warn consumers to be cautious – and are raising red flags about one set of limited benefit plans marketed to individuals for as little as $93 a month. Offered through brokers and online ads, the plans promise to be an “ACA compliant, affordable, integrated solution that help ... individuals avoid the penalties under [the health care law].”

Such skinny plans – sold for the first time to individuals – come amid uncertainty over the fate of the ACA and whether the Trump administration will ease rules on plans for individuals. Dozens of brokers are offering the plans.

“The Trump administration is injecting a significant amount of confusion into the implementation of the ACA,” said Kevin Lucia, project director at Georgetown University’s Health Policy Institute. “So it doesn’t surprise me that we would have arrangements popping up that might be trying to take advantage of that confusion.”

Apex Management Group of the Chicago area and Pennsylvania-based Xpress Healthcare have teamed up to offer the plans, and executives from both companies say they don’t need approval from state regulators to sell them. They are selling the policies across the country, although their websites note one state – Massachusetts – where the plans are not offered.

David Shull, Apex’s director of business development, said “this is not insurance” and the plans are designed to meet the “bulk of someone’s day-to-day needs.”

Legal and policy experts have raised concerns that the new plans could leave buyers incorrectly thinking they are exempt from paying a penalty for not having coverage. Additionally, they say, plans sold to individuals must be state-licensed – and one regulator has already asked for an investigation.

“Generally speaking, any entity selling health insurance in the state of California has to have a license,” Dave Jones, the Golden State’s insurance commissioner, said earlier this month. “I have asked the Department of Insurance staff to open an investigation with regard to this company to ascertain whether it is in violation of California law if they are selling it in California.”

Asked about a possible investigation, Apex owner Jeffrey Bemoras emailed a statement last week saying the firm is not offering plans to individuals in California. He also noted that the individual market accounts for only 2% of the company’s business.

“To be clear, Apex Management group adheres closely to all state and federal rules and regulations surrounding offering a self-insured MEC [minimal essential coverage] program,” he wrote. “We are test marketing our product in the individual environment. If at some point it doesn’t make sense to continue that investment we will not invest or focus in on that market.”

Price-tag appeal, but what about coverage?

The new plans promise to be a solution for individuals who say that conventional health insurance is too expensive. Those looking for alternatives to the ACA often earn too much to qualify for tax subsidies under the federal law.

Donna Harper, an insurance agent who runs a two-person brokerage in Crystal Lake, Ill., found herself in that situation. She sells the Xpress plans – and decided to buy one herself.

Ms. Harper says she canceled her BlueCross BlueShield plan, which did meet the ACA’s requirements, after it rose to nearly $11,000 in premiums this year, with a $6,000 annual deductible.

“Self-employed people are being priced out of the market,” she said, noting the new Xpress plan will save her more than $500 a month.

The Xpress Minimum Essential Coverage plans come in three levels, costing as little as $93 a month for individuals to as much as $516 for a family. They cover preventive care – including certain cancer screenings and vaccinations – while providing limited benefits for doctor visits, lab tests, and lower-cost prescription drugs.

There is little or no coverage for hospital, emergency room care, and expensive prescription drugs, such as chemotherapy.

Ms. Harper said she generally recommends that her clients who sign up for an Xpress plan also buy a hospital-only policy offered by other insurers. That extra policy would pay a set amount toward inpatient care – often ranging from $1,500 to $5,000 or so a day.

Still, experts caution that hospital bills are generally much higher than those amounts. A three-day stay averages $30,000, according to the federal government’s insurance website. And hospital plans can have tougher requirements. Unlike the Xpress programs, which don’t reject applicants who have preexisting medical conditions, hospital-only plans often do. Ms. Harper says she personally was rejected for one.

“I haven’t been in the hospital for 40 years, so I’m going to roll the dice,” she said. And if she winds up in the hospital? “I’ll just pay the bill.”

About 100 brokers nationwide are selling the plans, and interest “is picking up quick,” said Edward Pettola, co-owner and founder of Xpress, which for years has sold programs that offer discounts on dental, vision, and prescription services.

Caveat emptor

Experts question whether the plans exempt policyholders from the ACA’s tax penalty for not having “qualified” coverage, defined as a policy from an employer, a government program or a licensed product purchased on the individual market.

The penalty for tax year 2017 is the greater of a flat fee or a percentage of income. The annual total could range from as little as $695 for an individual to as much as $3,264 for a family.

President Trump issued an executive order in October designed to loosen insurance restrictions on lower-cost, alternative forms of coverage, but the administration has not signaled its view on what would be deemed qualified coverage.

Responding to questions from KHN, officials from Apex and Xpress said their plans are designed to be affordable, not to mimic ACA health plans.

“If that is what we are expected to do, just deliver what every Marketplace plan or carriers do, provide a Bronze, Silver Plan, etc., it would not solve the problem in addressing a benefit plan that is affordable,” the companies said in a joint email on Nov. 14. “Individuals are not required to have an insurance plan, but a plan that meets minimum essential coverage, the required preventive care services.”

Mr. Bemoras, in a separate interview, said his company has been selling a version of the plan to employers since 2015.

“As we see the political environment moving and wavering and not understanding what needs to be done, the individual market became extremely attractive to us,” Mr. Bemoras said.

Still, experts who reviewed the plans for KHN said policies sold to individuals must cover 10 broad categories of health care to qualify as ACA-compliant, including hospitalization and emergency room care, and cannot set annual or lifetime limits.

The Xpress/Apex programs do set limits, paying zero to $2,500 annually toward hospital care. Doctor visits are covered for a $20 copayment, but coverage is limited to three per year. Lab tests are limited to 5 services annually. To get those prices, patients have to use a physician or facility in the PHCS network, which says it has 900,000 providers nationwide. Low-cost generics are covered for as little as a $1 copay, but the amount patients pay rises sharply for more expensive drugs.

“I’m very skeptical,” said attorney Alden J. Bianchi of Mintz Levin, who advises firms on employee benefits. “That would be hard [to do] because in the individual market, you have to cover all the essential health benefits.”

The details can be confusing, partly because federal law allows group health plans – generally those offered by large employers – to provide workers with self-funded, minimal coverage plans like those offered by Apex, Mr. Bianchi said.

Apex’s Mr. Shull recently said in an email that the firm simply wants to offer coverage to people who otherwise could not afford an ACA plan.

“There will be states that want to halt this. Why, I do not understand,” he wrote. “Would an individual be better off going without anything? If they need prescriptions, lab or imaging services subject to a small copay, would you want to be the one to deny them?”

Some consumers might find the price attractive, but also find themselves vulnerable to unexpected costs, including the tax liability.

Ms. Harper, the broker who signed up for one of the plans, remains confident: “As long as Xpress satisfies the [mandate], which I’m told it does, my clients are in good hands. Even if it doesn’t, I don’t think it’s a big deal. You are saving that [the tax penalty amount] a month.”

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

Consumers coping with the high cost of health insurance are the target market for new plans claiming to be lower-cost alternatives to the Affordable Care Act that fulfill the law’s requirement for health coverage.

But experts and regulators warn consumers to be cautious – and are raising red flags about one set of limited benefit plans marketed to individuals for as little as $93 a month. Offered through brokers and online ads, the plans promise to be an “ACA compliant, affordable, integrated solution that help ... individuals avoid the penalties under [the health care law].”

Such skinny plans – sold for the first time to individuals – come amid uncertainty over the fate of the ACA and whether the Trump administration will ease rules on plans for individuals. Dozens of brokers are offering the plans.

“The Trump administration is injecting a significant amount of confusion into the implementation of the ACA,” said Kevin Lucia, project director at Georgetown University’s Health Policy Institute. “So it doesn’t surprise me that we would have arrangements popping up that might be trying to take advantage of that confusion.”

Apex Management Group of the Chicago area and Pennsylvania-based Xpress Healthcare have teamed up to offer the plans, and executives from both companies say they don’t need approval from state regulators to sell them. They are selling the policies across the country, although their websites note one state – Massachusetts – where the plans are not offered.

David Shull, Apex’s director of business development, said “this is not insurance” and the plans are designed to meet the “bulk of someone’s day-to-day needs.”

Legal and policy experts have raised concerns that the new plans could leave buyers incorrectly thinking they are exempt from paying a penalty for not having coverage. Additionally, they say, plans sold to individuals must be state-licensed – and one regulator has already asked for an investigation.

“Generally speaking, any entity selling health insurance in the state of California has to have a license,” Dave Jones, the Golden State’s insurance commissioner, said earlier this month. “I have asked the Department of Insurance staff to open an investigation with regard to this company to ascertain whether it is in violation of California law if they are selling it in California.”

Asked about a possible investigation, Apex owner Jeffrey Bemoras emailed a statement last week saying the firm is not offering plans to individuals in California. He also noted that the individual market accounts for only 2% of the company’s business.

“To be clear, Apex Management group adheres closely to all state and federal rules and regulations surrounding offering a self-insured MEC [minimal essential coverage] program,” he wrote. “We are test marketing our product in the individual environment. If at some point it doesn’t make sense to continue that investment we will not invest or focus in on that market.”

Price-tag appeal, but what about coverage?

The new plans promise to be a solution for individuals who say that conventional health insurance is too expensive. Those looking for alternatives to the ACA often earn too much to qualify for tax subsidies under the federal law.

Donna Harper, an insurance agent who runs a two-person brokerage in Crystal Lake, Ill., found herself in that situation. She sells the Xpress plans – and decided to buy one herself.

Ms. Harper says she canceled her BlueCross BlueShield plan, which did meet the ACA’s requirements, after it rose to nearly $11,000 in premiums this year, with a $6,000 annual deductible.

“Self-employed people are being priced out of the market,” she said, noting the new Xpress plan will save her more than $500 a month.

The Xpress Minimum Essential Coverage plans come in three levels, costing as little as $93 a month for individuals to as much as $516 for a family. They cover preventive care – including certain cancer screenings and vaccinations – while providing limited benefits for doctor visits, lab tests, and lower-cost prescription drugs.

There is little or no coverage for hospital, emergency room care, and expensive prescription drugs, such as chemotherapy.

Ms. Harper said she generally recommends that her clients who sign up for an Xpress plan also buy a hospital-only policy offered by other insurers. That extra policy would pay a set amount toward inpatient care – often ranging from $1,500 to $5,000 or so a day.

Still, experts caution that hospital bills are generally much higher than those amounts. A three-day stay averages $30,000, according to the federal government’s insurance website. And hospital plans can have tougher requirements. Unlike the Xpress programs, which don’t reject applicants who have preexisting medical conditions, hospital-only plans often do. Ms. Harper says she personally was rejected for one.

“I haven’t been in the hospital for 40 years, so I’m going to roll the dice,” she said. And if she winds up in the hospital? “I’ll just pay the bill.”

About 100 brokers nationwide are selling the plans, and interest “is picking up quick,” said Edward Pettola, co-owner and founder of Xpress, which for years has sold programs that offer discounts on dental, vision, and prescription services.

Caveat emptor

Experts question whether the plans exempt policyholders from the ACA’s tax penalty for not having “qualified” coverage, defined as a policy from an employer, a government program or a licensed product purchased on the individual market.

The penalty for tax year 2017 is the greater of a flat fee or a percentage of income. The annual total could range from as little as $695 for an individual to as much as $3,264 for a family.

President Trump issued an executive order in October designed to loosen insurance restrictions on lower-cost, alternative forms of coverage, but the administration has not signaled its view on what would be deemed qualified coverage.

Responding to questions from KHN, officials from Apex and Xpress said their plans are designed to be affordable, not to mimic ACA health plans.

“If that is what we are expected to do, just deliver what every Marketplace plan or carriers do, provide a Bronze, Silver Plan, etc., it would not solve the problem in addressing a benefit plan that is affordable,” the companies said in a joint email on Nov. 14. “Individuals are not required to have an insurance plan, but a plan that meets minimum essential coverage, the required preventive care services.”

Mr. Bemoras, in a separate interview, said his company has been selling a version of the plan to employers since 2015.

“As we see the political environment moving and wavering and not understanding what needs to be done, the individual market became extremely attractive to us,” Mr. Bemoras said.

Still, experts who reviewed the plans for KHN said policies sold to individuals must cover 10 broad categories of health care to qualify as ACA-compliant, including hospitalization and emergency room care, and cannot set annual or lifetime limits.

The Xpress/Apex programs do set limits, paying zero to $2,500 annually toward hospital care. Doctor visits are covered for a $20 copayment, but coverage is limited to three per year. Lab tests are limited to 5 services annually. To get those prices, patients have to use a physician or facility in the PHCS network, which says it has 900,000 providers nationwide. Low-cost generics are covered for as little as a $1 copay, but the amount patients pay rises sharply for more expensive drugs.

“I’m very skeptical,” said attorney Alden J. Bianchi of Mintz Levin, who advises firms on employee benefits. “That would be hard [to do] because in the individual market, you have to cover all the essential health benefits.”

The details can be confusing, partly because federal law allows group health plans – generally those offered by large employers – to provide workers with self-funded, minimal coverage plans like those offered by Apex, Mr. Bianchi said.

Apex’s Mr. Shull recently said in an email that the firm simply wants to offer coverage to people who otherwise could not afford an ACA plan.

“There will be states that want to halt this. Why, I do not understand,” he wrote. “Would an individual be better off going without anything? If they need prescriptions, lab or imaging services subject to a small copay, would you want to be the one to deny them?”

Some consumers might find the price attractive, but also find themselves vulnerable to unexpected costs, including the tax liability.

Ms. Harper, the broker who signed up for one of the plans, remains confident: “As long as Xpress satisfies the [mandate], which I’m told it does, my clients are in good hands. Even if it doesn’t, I don’t think it’s a big deal. You are saving that [the tax penalty amount] a month.”

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

The pharmacy chain pitches started in August: Come in and get your flu shot.

Convenience is touted. So are incentives: CVS offers a 20-percent-off shopping pass for everyone who gets a shot, while Walgreens donates toward international vaccination efforts.

The start of flu season is still weeks — if not months — away. Yet marketing of the vaccine has become an almost year-round effort, beginning when the shots become available in August and hyped as long as the supply lasts, often into April or May.

Not that long ago, most flu-shot campaigns started as the leaves began to turn in October. But the rise of retail medical clinics inside drug stores over the past decade — and state laws allowing pharmacists to give vaccinations — has stretched the flu-shot season.

The stores have figured out how “to deliver medical services in an on-demand way” which appeals to customers, particularly millennials, said Tom Charland, founder and CEO of Merchant Medicine, which tracks the walk-in clinic industry. “It’s a way to get people into the store to buy other things.”

But some experts say the marketing may be overtaking medical wisdom since it’s unclear how long the immunity imparted by the vaccine lasts, particularly in older people.

Federal health officials say it’s better to get the shot whenever you can. An early flu shot is better than no flu shot at all. But the science is mixed when it comes to how long a flu shot promoted and given during the waning days of summer will provide optimal protection, especially because flu season generally peaks in mid-winter or beyond. Experts are divided on how patients should respond to such offers.

“If you’re over 65, don’t get the flu vaccine in September. Or August. It’s a marketing scheme,” said Laura Haynes, an immunologist at the University of Connecticut Center on Aging.

That’s because a combination of factors makes it more difficult for the immune systems of people older than age 65 to respond to the vaccination in the first place. And its protective effects may wear off faster for this age group than it does for young people.

When is the best time to vaccinate? It’s a question even doctors have.

“Should I wait until October or November to vaccinate my elderly or medically frail patients?” That’s one of the queries on the website of the board that advises the Centers for Disease Control and Prevention on immunizations. The answer is that it is safe to make the shots available to all age groups when the vaccine becomes available, although it does include a caution.

The board says antibodies created by the vaccine decline in the months following vaccination “primarily affecting persons age 65 and older,” citing a study done during the 2011-2012 flu season. Still, while “delaying vaccination might permit greater immunity later in the season,” the CDC notes that “deferral could result in missed opportunities to vaccinate.”

How long will the immunity last?

“The data are very mixed,” said. John J. Treanor, a vaccine expert at the University of Rochester medical school. Some studies suggest vaccines lose some protectiveness during the course of a single flu season. Flu activity generally starts in the fall, but peaks in January or February and can run into the spring.

“So some might worry that if [they] got vaccinated very early and flu didn’t show up until very late, it might not work as well,” he said.

But other studies “show you still have protection from the shot you got last year if it’s a year when the strains didn’t change, Treanor said.

In any given flu season, vaccine effectiveness varies. One factor is how well the vaccines match the virus that is actually prevalent. Other factors influencing effectiveness include the age and general health of the recipient. In the overall population, the CDC says studies show vaccines can reduce the risk of flu by about 50 to 60 percent when the vaccines are well matched.

Health officials say it’s especially important to vaccinate children because they often spread the disease, are better able to develop antibodies from the vaccines and, if they don’t get sick, they won’t expose grandma and grandpa. While most people who get the flu recover, it is a serious disease responsible for many deaths each year, particularly among older adults and young children. Influenza’s intensity varies annually, with the CDC saying deaths associated with the flu have ranged from about 3,300 a year to 49,000 during the past 31 seasons.

To develop vaccines, manufacturers and scientists study what’s circulating in the Southern Hemisphere during its winter, which is our summer. Then — based on that evidence — forecast what flu strains might circulate here to make vaccines that are generally delivered in late July.

For the upcoming season, the vaccines will include three or four strains, including two A strains, an H1N1 and an H3N2, as well as one or two B strains, according to the CDC. It recommends that everyone older than 6 months get vaccinated, unless they have health conditions that would prevent it.

The vaccines can’t give a person the flu because the virus is killed before it’s included in the shot. This year, the nasal vaccine is not recommended for use, as studies showed it was not effective during several of the past flu seasons.

But when to go?

“The ideal time is between Halloween and Thanksgiving,” said Haynes at UConn. “If you can’t wait and the only chance is to get it in September, then go ahead and get it. It’s best to get it early rather than not at all.”

This Kaiser Health News story also ran on NPR. 

The pharmacy chain pitches started in August: Come in and get your flu shot.

Convenience is touted. So are incentives: CVS offers a 20-percent-off shopping pass for everyone who gets a shot, while Walgreens donates toward international vaccination efforts.

The start of flu season is still weeks — if not months — away. Yet marketing of the vaccine has become an almost year-round effort, beginning when the shots become available in August and hyped as long as the supply lasts, often into April or May.

Not that long ago, most flu-shot campaigns started as the leaves began to turn in October. But the rise of retail medical clinics inside drug stores over the past decade — and state laws allowing pharmacists to give vaccinations — has stretched the flu-shot season.

The stores have figured out how “to deliver medical services in an on-demand way” which appeals to customers, particularly millennials, said Tom Charland, founder and CEO of Merchant Medicine, which tracks the walk-in clinic industry. “It’s a way to get people into the store to buy other things.”

But some experts say the marketing may be overtaking medical wisdom since it’s unclear how long the immunity imparted by the vaccine lasts, particularly in older people.

Federal health officials say it’s better to get the shot whenever you can. An early flu shot is better than no flu shot at all. But the science is mixed when it comes to how long a flu shot promoted and given during the waning days of summer will provide optimal protection, especially because flu season generally peaks in mid-winter or beyond. Experts are divided on how patients should respond to such offers.

“If you’re over 65, don’t get the flu vaccine in September. Or August. It’s a marketing scheme,” said Laura Haynes, an immunologist at the University of Connecticut Center on Aging.

That’s because a combination of factors makes it more difficult for the immune systems of people older than age 65 to respond to the vaccination in the first place. And its protective effects may wear off faster for this age group than it does for young people.

When is the best time to vaccinate? It’s a question even doctors have.

“Should I wait until October or November to vaccinate my elderly or medically frail patients?” That’s one of the queries on the website of the board that advises the Centers for Disease Control and Prevention on immunizations. The answer is that it is safe to make the shots available to all age groups when the vaccine becomes available, although it does include a caution.

The board says antibodies created by the vaccine decline in the months following vaccination “primarily affecting persons age 65 and older,” citing a study done during the 2011-2012 flu season. Still, while “delaying vaccination might permit greater immunity later in the season,” the CDC notes that “deferral could result in missed opportunities to vaccinate.”

How long will the immunity last?

“The data are very mixed,” said. John J. Treanor, a vaccine expert at the University of Rochester medical school. Some studies suggest vaccines lose some protectiveness during the course of a single flu season. Flu activity generally starts in the fall, but peaks in January or February and can run into the spring.

“So some might worry that if [they] got vaccinated very early and flu didn’t show up until very late, it might not work as well,” he said.

But other studies “show you still have protection from the shot you got last year if it’s a year when the strains didn’t change, Treanor said.

In any given flu season, vaccine effectiveness varies. One factor is how well the vaccines match the virus that is actually prevalent. Other factors influencing effectiveness include the age and general health of the recipient. In the overall population, the CDC says studies show vaccines can reduce the risk of flu by about 50 to 60 percent when the vaccines are well matched.

Health officials say it’s especially important to vaccinate children because they often spread the disease, are better able to develop antibodies from the vaccines and, if they don’t get sick, they won’t expose grandma and grandpa. While most people who get the flu recover, it is a serious disease responsible for many deaths each year, particularly among older adults and young children. Influenza’s intensity varies annually, with the CDC saying deaths associated with the flu have ranged from about 3,300 a year to 49,000 during the past 31 seasons.

To develop vaccines, manufacturers and scientists study what’s circulating in the Southern Hemisphere during its winter, which is our summer. Then — based on that evidence — forecast what flu strains might circulate here to make vaccines that are generally delivered in late July.

For the upcoming season, the vaccines will include three or four strains, including two A strains, an H1N1 and an H3N2, as well as one or two B strains, according to the CDC. It recommends that everyone older than 6 months get vaccinated, unless they have health conditions that would prevent it.

The vaccines can’t give a person the flu because the virus is killed before it’s included in the shot. This year, the nasal vaccine is not recommended for use, as studies showed it was not effective during several of the past flu seasons.

But when to go?

“The ideal time is between Halloween and Thanksgiving,” said Haynes at UConn. “If you can’t wait and the only chance is to get it in September, then go ahead and get it. It’s best to get it early rather than not at all.”

This Kaiser Health News story also ran on NPR. 

The pharmacy chain pitches started in August: Come in and get your flu shot.

Convenience is touted. So are incentives: CVS offers a 20-percent-off shopping pass for everyone who gets a shot, while Walgreens donates toward international vaccination efforts.

The start of flu season is still weeks — if not months — away. Yet marketing of the vaccine has become an almost year-round effort, beginning when the shots become available in August and hyped as long as the supply lasts, often into April or May.

Not that long ago, most flu-shot campaigns started as the leaves began to turn in October. But the rise of retail medical clinics inside drug stores over the past decade — and state laws allowing pharmacists to give vaccinations — has stretched the flu-shot season.

The stores have figured out how “to deliver medical services in an on-demand way” which appeals to customers, particularly millennials, said Tom Charland, founder and CEO of Merchant Medicine, which tracks the walk-in clinic industry. “It’s a way to get people into the store to buy other things.”

But some experts say the marketing may be overtaking medical wisdom since it’s unclear how long the immunity imparted by the vaccine lasts, particularly in older people.

Federal health officials say it’s better to get the shot whenever you can. An early flu shot is better than no flu shot at all. But the science is mixed when it comes to how long a flu shot promoted and given during the waning days of summer will provide optimal protection, especially because flu season generally peaks in mid-winter or beyond. Experts are divided on how patients should respond to such offers.

“If you’re over 65, don’t get the flu vaccine in September. Or August. It’s a marketing scheme,” said Laura Haynes, an immunologist at the University of Connecticut Center on Aging.

That’s because a combination of factors makes it more difficult for the immune systems of people older than age 65 to respond to the vaccination in the first place. And its protective effects may wear off faster for this age group than it does for young people.

When is the best time to vaccinate? It’s a question even doctors have.

“Should I wait until October or November to vaccinate my elderly or medically frail patients?” That’s one of the queries on the website of the board that advises the Centers for Disease Control and Prevention on immunizations. The answer is that it is safe to make the shots available to all age groups when the vaccine becomes available, although it does include a caution.

The board says antibodies created by the vaccine decline in the months following vaccination “primarily affecting persons age 65 and older,” citing a study done during the 2011-2012 flu season. Still, while “delaying vaccination might permit greater immunity later in the season,” the CDC notes that “deferral could result in missed opportunities to vaccinate.”

How long will the immunity last?

“The data are very mixed,” said. John J. Treanor, a vaccine expert at the University of Rochester medical school. Some studies suggest vaccines lose some protectiveness during the course of a single flu season. Flu activity generally starts in the fall, but peaks in January or February and can run into the spring.

“So some might worry that if [they] got vaccinated very early and flu didn’t show up until very late, it might not work as well,” he said.

But other studies “show you still have protection from the shot you got last year if it’s a year when the strains didn’t change, Treanor said.

In any given flu season, vaccine effectiveness varies. One factor is how well the vaccines match the virus that is actually prevalent. Other factors influencing effectiveness include the age and general health of the recipient. In the overall population, the CDC says studies show vaccines can reduce the risk of flu by about 50 to 60 percent when the vaccines are well matched.

Health officials say it’s especially important to vaccinate children because they often spread the disease, are better able to develop antibodies from the vaccines and, if they don’t get sick, they won’t expose grandma and grandpa. While most people who get the flu recover, it is a serious disease responsible for many deaths each year, particularly among older adults and young children. Influenza’s intensity varies annually, with the CDC saying deaths associated with the flu have ranged from about 3,300 a year to 49,000 during the past 31 seasons.

To develop vaccines, manufacturers and scientists study what’s circulating in the Southern Hemisphere during its winter, which is our summer. Then — based on that evidence — forecast what flu strains might circulate here to make vaccines that are generally delivered in late July.

For the upcoming season, the vaccines will include three or four strains, including two A strains, an H1N1 and an H3N2, as well as one or two B strains, according to the CDC. It recommends that everyone older than 6 months get vaccinated, unless they have health conditions that would prevent it.

The vaccines can’t give a person the flu because the virus is killed before it’s included in the shot. This year, the nasal vaccine is not recommended for use, as studies showed it was not effective during several of the past flu seasons.

But when to go?

“The ideal time is between Halloween and Thanksgiving,” said Haynes at UConn. “If you can’t wait and the only chance is to get it in September, then go ahead and get it. It’s best to get it early rather than not at all.”

This Kaiser Health News story also ran on NPR. 

The nation’s ongoing opioid problem comes with staggering physical and emotional costs to patients and families. But the dollar cost to the health system has been harder to peg. Now a new report shows a more than 1,300 percent rise in spending by health insurers in a four-year period on patients with a diagnosis of opioid dependence or abuse.

From 2011 to 2015, insurers’ payments to hospitals, laboratories, treatment centers and other medical providers for these patients grew from $32 million to $446 million – a 1,375 percent increase.

While that’s a small portion of the overall spending on medical care in the United States, the rapid rise is cause for concern, says Robin Gelburd, president of Fair Health, a nonprofit databank that provides cost information to the health industry and consumers.

“That really shows the stress on the health system and the impact on the individuals,” said Gelburd.

The Fair Health study found a sharp difference in how much insurers spend on individual patients with such a diagnosis.

On average, insurers spend $3,435 a year on an individual patient, but for those with an opioid dependence or abuse diagnosis, that amount jumps to $19,333. Those numbers reflect what insurers actually paid. The report also includes data on what providers charged, amounts that are lowered by their contracts with insurers.

The study, set to be released Tuesday, builds on one Fair Health released in early August that found a 3,000 percent increase in the volume of insurance claims related to opioid dependence diagnoses between 2007 and 2014.

The latest study – part of a series – offers amounts associated with claims billed by providers and paid by insurers for the types of medical services used.

Both studies use de-identified claims data from insurers representing more than 150 million insured Americans who either have insurance through work or buy coverage on their own.

There have been other efforts by several researchers to quantify the cost of the opioid problem on the overall economy, estimated in the tens of billions of dollars.

The new report adds to the available data “that it’s not just the human cost associated with the opioid crisis that is enormous, but also that the economic costs are staggering,” said Dr. Andrew Kolodny, senior scientist at Brandeis University. He did not work on the study.

The surge in spending on patients with opioid diagnoses is likely a combination of factors, the report notes. As media attention focuses on drug dependency, more people may be seeking treatment. At the same time, prescription and illegal use of narcotics may also be increasing.

The study found that emergency room visits and laboratory tests accounted for much of the spending.

Based on claims volume, the fastest-growing set of services in terms of utilization were for alcohol or drug therapy. Lab tests, including checks for barbiturate or opioid use, were not far behind.

Researchers did not use 2015 data for lab test costs, noting that a change in billing codes was made that increased the number of categories – and, in some cases, appear to generate higher payments by insurers. It is too early to estimate the long-term effects of the change, Gelburd said.

The report gives some examples of the changes, however. For example, one billing code for a test on opiate use commonly brought in a $31 payment from insurers prior to the change. The two billing codes that replaced it now are commonly paid at $78 and $156.

The new billing codes may reflect new technology in testing, said Gelburd. She said some observers speculate that the rapid increase in lab spending might reflect that, with more patients in therapy, the tests are being used to ensure they are taking their proper medications and not abusing narcotics.

But the spending might also reflect a growing use of very expensive urine and blood tests when less expensive ones would be sufficient, said Kolodny.

“I worry about profiteering,” said Kolodny. “We do need tests, but not the expensive ones. A lot of clinics are making extra money off these lab tests.”

The overall increase in spending across all types of medical services “is a societal issue,” said Gelburd, who says policymakers need to ensure that changes are made to address the problem.

“Are medical school curricula adjusting to recognize the growing need for these services? Are insurers increasing the number of providers in their networks to ensure sufficient access? Are consumers being educated? It’s an issue that has to be dealt with in all quadrants.”

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

The nation’s ongoing opioid problem comes with staggering physical and emotional costs to patients and families. But the dollar cost to the health system has been harder to peg. Now a new report shows a more than 1,300 percent rise in spending by health insurers in a four-year period on patients with a diagnosis of opioid dependence or abuse.

From 2011 to 2015, insurers’ payments to hospitals, laboratories, treatment centers and other medical providers for these patients grew from $32 million to $446 million – a 1,375 percent increase.

While that’s a small portion of the overall spending on medical care in the United States, the rapid rise is cause for concern, says Robin Gelburd, president of Fair Health, a nonprofit databank that provides cost information to the health industry and consumers.

“That really shows the stress on the health system and the impact on the individuals,” said Gelburd.

The Fair Health study found a sharp difference in how much insurers spend on individual patients with such a diagnosis.

On average, insurers spend $3,435 a year on an individual patient, but for those with an opioid dependence or abuse diagnosis, that amount jumps to $19,333. Those numbers reflect what insurers actually paid. The report also includes data on what providers charged, amounts that are lowered by their contracts with insurers.

The study, set to be released Tuesday, builds on one Fair Health released in early August that found a 3,000 percent increase in the volume of insurance claims related to opioid dependence diagnoses between 2007 and 2014.

The latest study – part of a series – offers amounts associated with claims billed by providers and paid by insurers for the types of medical services used.

Both studies use de-identified claims data from insurers representing more than 150 million insured Americans who either have insurance through work or buy coverage on their own.

There have been other efforts by several researchers to quantify the cost of the opioid problem on the overall economy, estimated in the tens of billions of dollars.

The new report adds to the available data “that it’s not just the human cost associated with the opioid crisis that is enormous, but also that the economic costs are staggering,” said Dr. Andrew Kolodny, senior scientist at Brandeis University. He did not work on the study.

The surge in spending on patients with opioid diagnoses is likely a combination of factors, the report notes. As media attention focuses on drug dependency, more people may be seeking treatment. At the same time, prescription and illegal use of narcotics may also be increasing.

The study found that emergency room visits and laboratory tests accounted for much of the spending.

Based on claims volume, the fastest-growing set of services in terms of utilization were for alcohol or drug therapy. Lab tests, including checks for barbiturate or opioid use, were not far behind.

Researchers did not use 2015 data for lab test costs, noting that a change in billing codes was made that increased the number of categories – and, in some cases, appear to generate higher payments by insurers. It is too early to estimate the long-term effects of the change, Gelburd said.

The report gives some examples of the changes, however. For example, one billing code for a test on opiate use commonly brought in a $31 payment from insurers prior to the change. The two billing codes that replaced it now are commonly paid at $78 and $156.

The new billing codes may reflect new technology in testing, said Gelburd. She said some observers speculate that the rapid increase in lab spending might reflect that, with more patients in therapy, the tests are being used to ensure they are taking their proper medications and not abusing narcotics.

But the spending might also reflect a growing use of very expensive urine and blood tests when less expensive ones would be sufficient, said Kolodny.

“I worry about profiteering,” said Kolodny. “We do need tests, but not the expensive ones. A lot of clinics are making extra money off these lab tests.”

The overall increase in spending across all types of medical services “is a societal issue,” said Gelburd, who says policymakers need to ensure that changes are made to address the problem.

“Are medical school curricula adjusting to recognize the growing need for these services? Are insurers increasing the number of providers in their networks to ensure sufficient access? Are consumers being educated? It’s an issue that has to be dealt with in all quadrants.”

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

The nation’s ongoing opioid problem comes with staggering physical and emotional costs to patients and families. But the dollar cost to the health system has been harder to peg. Now a new report shows a more than 1,300 percent rise in spending by health insurers in a four-year period on patients with a diagnosis of opioid dependence or abuse.

From 2011 to 2015, insurers’ payments to hospitals, laboratories, treatment centers and other medical providers for these patients grew from $32 million to $446 million – a 1,375 percent increase.

While that’s a small portion of the overall spending on medical care in the United States, the rapid rise is cause for concern, says Robin Gelburd, president of Fair Health, a nonprofit databank that provides cost information to the health industry and consumers.

“That really shows the stress on the health system and the impact on the individuals,” said Gelburd.

The Fair Health study found a sharp difference in how much insurers spend on individual patients with such a diagnosis.

On average, insurers spend $3,435 a year on an individual patient, but for those with an opioid dependence or abuse diagnosis, that amount jumps to $19,333. Those numbers reflect what insurers actually paid. The report also includes data on what providers charged, amounts that are lowered by their contracts with insurers.

The study, set to be released Tuesday, builds on one Fair Health released in early August that found a 3,000 percent increase in the volume of insurance claims related to opioid dependence diagnoses between 2007 and 2014.

The latest study – part of a series – offers amounts associated with claims billed by providers and paid by insurers for the types of medical services used.

Both studies use de-identified claims data from insurers representing more than 150 million insured Americans who either have insurance through work or buy coverage on their own.

There have been other efforts by several researchers to quantify the cost of the opioid problem on the overall economy, estimated in the tens of billions of dollars.

The new report adds to the available data “that it’s not just the human cost associated with the opioid crisis that is enormous, but also that the economic costs are staggering,” said Dr. Andrew Kolodny, senior scientist at Brandeis University. He did not work on the study.

The surge in spending on patients with opioid diagnoses is likely a combination of factors, the report notes. As media attention focuses on drug dependency, more people may be seeking treatment. At the same time, prescription and illegal use of narcotics may also be increasing.

The study found that emergency room visits and laboratory tests accounted for much of the spending.

Based on claims volume, the fastest-growing set of services in terms of utilization were for alcohol or drug therapy. Lab tests, including checks for barbiturate or opioid use, were not far behind.

Researchers did not use 2015 data for lab test costs, noting that a change in billing codes was made that increased the number of categories – and, in some cases, appear to generate higher payments by insurers. It is too early to estimate the long-term effects of the change, Gelburd said.

The report gives some examples of the changes, however. For example, one billing code for a test on opiate use commonly brought in a $31 payment from insurers prior to the change. The two billing codes that replaced it now are commonly paid at $78 and $156.

The new billing codes may reflect new technology in testing, said Gelburd. She said some observers speculate that the rapid increase in lab spending might reflect that, with more patients in therapy, the tests are being used to ensure they are taking their proper medications and not abusing narcotics.

But the spending might also reflect a growing use of very expensive urine and blood tests when less expensive ones would be sufficient, said Kolodny.

“I worry about profiteering,” said Kolodny. “We do need tests, but not the expensive ones. A lot of clinics are making extra money off these lab tests.”

The overall increase in spending across all types of medical services “is a societal issue,” said Gelburd, who says policymakers need to ensure that changes are made to address the problem.

“Are medical school curricula adjusting to recognize the growing need for these services? Are insurers increasing the number of providers in their networks to ensure sufficient access? Are consumers being educated? It’s an issue that has to be dealt with in all quadrants.”

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

Following weeks of criticism over dramatic price increases on its EpiPen, Mylan said on Aug. 29 that it will offer a generic version of the life-saving allergy treatment. The generic, which the company says will be identical to the brand product, will sell for $300 for a two-pack, which is half the cost of Mylan’s brand name EpiPens. The news did little to dim the ongoing outcry over the price, for which there are no other competitors on the market. Some called it a marketing ploy, while Robert Weissman, president of the consumer group Public Citizen, said the generic price was still too high, writing in the Huffington Post of “the weirdness of a drug company offering a generic version” of its own brand-name product.

KHN offers answers to some key questions related to Mylan’s generic and breaks down what this development could mean for consumers and the marketplace.

When will I be able to get a generic EpiPen?Mylan, which is the company that markets this treatment, says it will have a product out within a few weeks. Pfizer is the firm that actually manufactures EpiPens. The drug used is the product epinephrine but the patent applies to the auto-injector device used to deliver it.

Will it cost me less?

For some patients, yes. Those who are uninsured, pay a percentage of the drug cost as their insurance copayment or have an unmet prescription deductible will likely pay less for the $300 two-pack generic than for the brand-name version. That’s because what they pay is based on the full price. Many other consumer have insurance with flat-dollar drug copayments, ranging from $10 to $100 for every prescription so they are paying far less than the retail price. Insurers generally set lower copayments for generic drugs than brand. So if a consumer’s health insurer makes the generic available and places it in the generic payment “tier,” the cost per prescription also could fall. In some cases, however, there is a possibility that some people who could benefit from the lower cost generic won’t have access to it. An insurer or pharmacy benefit manager, for example, might not add the generic EpiPen to the formulary, or restrict its availability in some way. That’s because some health plans get such large rebates from brand-name companies as to make the brand-name version cost less than the generic, said Adam Fein, president of Pembroke Consulting. But consumers do not benefit from rebates directly. Instead, it goes to the pharmacy manager, insurer or employer.

Are manufacturer rebates good?

It depends. They can help lower the cost of the drug for insurers and employers, helping slow overall spending and keep costs paid by consumers such as premiums and deductibles lower. “If we didn’t have rebates [spending on drugs] would be at least 35 percent higher,” said Richard Evans, co-founder of SSR Health, who does investment research on the pharmaceutical industry.

Even so, some say rebates should be barred in favor of more transparent prices. Stephen Schondelmeyer, director of the Prime Institute, an independent consulting group that monitors pharmaceutical trends, said discounts don’t make him feel good when his health plan is paying about $700 for EpiPens that it paid $80 for five years ago. “We should outlaw rebates,” said Schondelmeyer, who also helps oversee the University of Minnesota’s health plan. “What rebates are really is a way to overcharge the market. … We are giving the drug industry loans to the tune of billions of dollars … and rarely does it get back to the end consumer.”

Are drugmakers even allowed to create generic versions of their own products?

Many major drugmakers also market their drugs as generics. Called “authorized generics,” such products are identical to the drugs approved by the Food and Drug Administration as part of a manufacturer’s New Drug Application. Drugmakers do not need to go back to the FDA for any further approvals in order to market an authorized generic.

Why would drugmakers want to offer a generic to their own product?

Most authorized generics appear on the market just as a competitor launches a generic of its own. In those cases, the move helps brand manufacturers retain some revenue that might otherwise be lost to competitors because the entry of less costly generics generally results in a sharp drop in brand-name sales. Manufacturers are careful not to release the authorized generic much before it loses patent protection, because it doesn’t want it to undercut sales of its more pricey brand-name product.

So why is Mylan doing this?

Mylan appears to be offering its “authorized generic” in response to complaints about the cost of its brand-name drug, not fear of competition from rivals. It currently controls the market. Pembroke’s Fein said Mylan miscalculated when it raised EpiPen’s price tag from about $100 to $600 over the past decade.

During that time, the firm failed to notice that insurance coverage had changed, Fein said. Instead of flat-dollar copayments, a growing number of consumers now have prescription deductibles they must meet first. That means some consumers are on the hook for the full $600. “They behaved as if everyone had good insurance,” said Fein. And the firm still seems to argue that raising its prices would not hurt most consumers, noting that many had flat copayments of less than $100. But, as the price rose, their insurer or the employer who provides coverage made up the difference, helping fuel premium and deductible increases.

“Premiums are an out-of-pocket cost,” said Schondelmeyer. “That’s what Mylan and other manufacturers have ignored.”

Do authorized generics reduce competition, which is supposed to help lower prices?

Some generic companies argue that is the case, saying a brand-name company jumping in ahead of rivals makes it less attractive for generic makers to bring their own products to market or challenge existing patents held by brand-name companies. But a 2011 Federal Trade Commission report found that authorized generics did not “measurably” reduce the number of patent challenges. The study also said the presence of authorized generics actually resulted in retail generic prices that were 4 to 8 percent lower than they would have been without.

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation. Julie Appleby reports on the health care law’s implementation, health care treatments and costs, trends in health insurance, and policy affecting hospitals and other medical providers. Her stories have appeared in USA Today, the Washington Post, the Philadelphia Inquirer, MSNBC and others. Before joining KHN, Appleby spent 10 years covering the health care industry and policy at USA Today. She also worked at the San Francisco Chronicle, The Financial Times in London and the Contra Costa Times in Walnut Creek, Calif. She serves on the board of the Association of Health Care Journalists and has a Master of Public Health degree.

Following weeks of criticism over dramatic price increases on its EpiPen, Mylan said on Aug. 29 that it will offer a generic version of the life-saving allergy treatment. The generic, which the company says will be identical to the brand product, will sell for $300 for a two-pack, which is half the cost of Mylan’s brand name EpiPens. The news did little to dim the ongoing outcry over the price, for which there are no other competitors on the market. Some called it a marketing ploy, while Robert Weissman, president of the consumer group Public Citizen, said the generic price was still too high, writing in the Huffington Post of “the weirdness of a drug company offering a generic version” of its own brand-name product.

KHN offers answers to some key questions related to Mylan’s generic and breaks down what this development could mean for consumers and the marketplace.

When will I be able to get a generic EpiPen?Mylan, which is the company that markets this treatment, says it will have a product out within a few weeks. Pfizer is the firm that actually manufactures EpiPens. The drug used is the product epinephrine but the patent applies to the auto-injector device used to deliver it.

Will it cost me less?

For some patients, yes. Those who are uninsured, pay a percentage of the drug cost as their insurance copayment or have an unmet prescription deductible will likely pay less for the $300 two-pack generic than for the brand-name version. That’s because what they pay is based on the full price. Many other consumer have insurance with flat-dollar drug copayments, ranging from $10 to $100 for every prescription so they are paying far less than the retail price. Insurers generally set lower copayments for generic drugs than brand. So if a consumer’s health insurer makes the generic available and places it in the generic payment “tier,” the cost per prescription also could fall. In some cases, however, there is a possibility that some people who could benefit from the lower cost generic won’t have access to it. An insurer or pharmacy benefit manager, for example, might not add the generic EpiPen to the formulary, or restrict its availability in some way. That’s because some health plans get such large rebates from brand-name companies as to make the brand-name version cost less than the generic, said Adam Fein, president of Pembroke Consulting. But consumers do not benefit from rebates directly. Instead, it goes to the pharmacy manager, insurer or employer.

Are manufacturer rebates good?

It depends. They can help lower the cost of the drug for insurers and employers, helping slow overall spending and keep costs paid by consumers such as premiums and deductibles lower. “If we didn’t have rebates [spending on drugs] would be at least 35 percent higher,” said Richard Evans, co-founder of SSR Health, who does investment research on the pharmaceutical industry.

Even so, some say rebates should be barred in favor of more transparent prices. Stephen Schondelmeyer, director of the Prime Institute, an independent consulting group that monitors pharmaceutical trends, said discounts don’t make him feel good when his health plan is paying about $700 for EpiPens that it paid $80 for five years ago. “We should outlaw rebates,” said Schondelmeyer, who also helps oversee the University of Minnesota’s health plan. “What rebates are really is a way to overcharge the market. … We are giving the drug industry loans to the tune of billions of dollars … and rarely does it get back to the end consumer.”

Are drugmakers even allowed to create generic versions of their own products?

Many major drugmakers also market their drugs as generics. Called “authorized generics,” such products are identical to the drugs approved by the Food and Drug Administration as part of a manufacturer’s New Drug Application. Drugmakers do not need to go back to the FDA for any further approvals in order to market an authorized generic.

Why would drugmakers want to offer a generic to their own product?

Most authorized generics appear on the market just as a competitor launches a generic of its own. In those cases, the move helps brand manufacturers retain some revenue that might otherwise be lost to competitors because the entry of less costly generics generally results in a sharp drop in brand-name sales. Manufacturers are careful not to release the authorized generic much before it loses patent protection, because it doesn’t want it to undercut sales of its more pricey brand-name product.

So why is Mylan doing this?

Mylan appears to be offering its “authorized generic” in response to complaints about the cost of its brand-name drug, not fear of competition from rivals. It currently controls the market. Pembroke’s Fein said Mylan miscalculated when it raised EpiPen’s price tag from about $100 to $600 over the past decade.

During that time, the firm failed to notice that insurance coverage had changed, Fein said. Instead of flat-dollar copayments, a growing number of consumers now have prescription deductibles they must meet first. That means some consumers are on the hook for the full $600. “They behaved as if everyone had good insurance,” said Fein. And the firm still seems to argue that raising its prices would not hurt most consumers, noting that many had flat copayments of less than $100. But, as the price rose, their insurer or the employer who provides coverage made up the difference, helping fuel premium and deductible increases.

“Premiums are an out-of-pocket cost,” said Schondelmeyer. “That’s what Mylan and other manufacturers have ignored.”

Do authorized generics reduce competition, which is supposed to help lower prices?

Some generic companies argue that is the case, saying a brand-name company jumping in ahead of rivals makes it less attractive for generic makers to bring their own products to market or challenge existing patents held by brand-name companies. But a 2011 Federal Trade Commission report found that authorized generics did not “measurably” reduce the number of patent challenges. The study also said the presence of authorized generics actually resulted in retail generic prices that were 4 to 8 percent lower than they would have been without.

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation. Julie Appleby reports on the health care law’s implementation, health care treatments and costs, trends in health insurance, and policy affecting hospitals and other medical providers. Her stories have appeared in USA Today, the Washington Post, the Philadelphia Inquirer, MSNBC and others. Before joining KHN, Appleby spent 10 years covering the health care industry and policy at USA Today. She also worked at the San Francisco Chronicle, The Financial Times in London and the Contra Costa Times in Walnut Creek, Calif. She serves on the board of the Association of Health Care Journalists and has a Master of Public Health degree.

Following weeks of criticism over dramatic price increases on its EpiPen, Mylan said on Aug. 29 that it will offer a generic version of the life-saving allergy treatment. The generic, which the company says will be identical to the brand product, will sell for $300 for a two-pack, which is half the cost of Mylan’s brand name EpiPens. The news did little to dim the ongoing outcry over the price, for which there are no other competitors on the market. Some called it a marketing ploy, while Robert Weissman, president of the consumer group Public Citizen, said the generic price was still too high, writing in the Huffington Post of “the weirdness of a drug company offering a generic version” of its own brand-name product.

KHN offers answers to some key questions related to Mylan’s generic and breaks down what this development could mean for consumers and the marketplace.

When will I be able to get a generic EpiPen?Mylan, which is the company that markets this treatment, says it will have a product out within a few weeks. Pfizer is the firm that actually manufactures EpiPens. The drug used is the product epinephrine but the patent applies to the auto-injector device used to deliver it.

Will it cost me less?

For some patients, yes. Those who are uninsured, pay a percentage of the drug cost as their insurance copayment or have an unmet prescription deductible will likely pay less for the $300 two-pack generic than for the brand-name version. That’s because what they pay is based on the full price. Many other consumer have insurance with flat-dollar drug copayments, ranging from $10 to $100 for every prescription so they are paying far less than the retail price. Insurers generally set lower copayments for generic drugs than brand. So if a consumer’s health insurer makes the generic available and places it in the generic payment “tier,” the cost per prescription also could fall. In some cases, however, there is a possibility that some people who could benefit from the lower cost generic won’t have access to it. An insurer or pharmacy benefit manager, for example, might not add the generic EpiPen to the formulary, or restrict its availability in some way. That’s because some health plans get such large rebates from brand-name companies as to make the brand-name version cost less than the generic, said Adam Fein, president of Pembroke Consulting. But consumers do not benefit from rebates directly. Instead, it goes to the pharmacy manager, insurer or employer.

Are manufacturer rebates good?

It depends. They can help lower the cost of the drug for insurers and employers, helping slow overall spending and keep costs paid by consumers such as premiums and deductibles lower. “If we didn’t have rebates [spending on drugs] would be at least 35 percent higher,” said Richard Evans, co-founder of SSR Health, who does investment research on the pharmaceutical industry.

Even so, some say rebates should be barred in favor of more transparent prices. Stephen Schondelmeyer, director of the Prime Institute, an independent consulting group that monitors pharmaceutical trends, said discounts don’t make him feel good when his health plan is paying about $700 for EpiPens that it paid $80 for five years ago. “We should outlaw rebates,” said Schondelmeyer, who also helps oversee the University of Minnesota’s health plan. “What rebates are really is a way to overcharge the market. … We are giving the drug industry loans to the tune of billions of dollars … and rarely does it get back to the end consumer.”

Are drugmakers even allowed to create generic versions of their own products?

Many major drugmakers also market their drugs as generics. Called “authorized generics,” such products are identical to the drugs approved by the Food and Drug Administration as part of a manufacturer’s New Drug Application. Drugmakers do not need to go back to the FDA for any further approvals in order to market an authorized generic.

Why would drugmakers want to offer a generic to their own product?

Most authorized generics appear on the market just as a competitor launches a generic of its own. In those cases, the move helps brand manufacturers retain some revenue that might otherwise be lost to competitors because the entry of less costly generics generally results in a sharp drop in brand-name sales. Manufacturers are careful not to release the authorized generic much before it loses patent protection, because it doesn’t want it to undercut sales of its more pricey brand-name product.

So why is Mylan doing this?

Mylan appears to be offering its “authorized generic” in response to complaints about the cost of its brand-name drug, not fear of competition from rivals. It currently controls the market. Pembroke’s Fein said Mylan miscalculated when it raised EpiPen’s price tag from about $100 to $600 over the past decade.

During that time, the firm failed to notice that insurance coverage had changed, Fein said. Instead of flat-dollar copayments, a growing number of consumers now have prescription deductibles they must meet first. That means some consumers are on the hook for the full $600. “They behaved as if everyone had good insurance,” said Fein. And the firm still seems to argue that raising its prices would not hurt most consumers, noting that many had flat copayments of less than $100. But, as the price rose, their insurer or the employer who provides coverage made up the difference, helping fuel premium and deductible increases.

“Premiums are an out-of-pocket cost,” said Schondelmeyer. “That’s what Mylan and other manufacturers have ignored.”

Do authorized generics reduce competition, which is supposed to help lower prices?

Some generic companies argue that is the case, saying a brand-name company jumping in ahead of rivals makes it less attractive for generic makers to bring their own products to market or challenge existing patents held by brand-name companies. But a 2011 Federal Trade Commission report found that authorized generics did not “measurably” reduce the number of patent challenges. The study also said the presence of authorized generics actually resulted in retail generic prices that were 4 to 8 percent lower than they would have been without.

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation. Julie Appleby reports on the health care law’s implementation, health care treatments and costs, trends in health insurance, and policy affecting hospitals and other medical providers. Her stories have appeared in USA Today, the Washington Post, the Philadelphia Inquirer, MSNBC and others. Before joining KHN, Appleby spent 10 years covering the health care industry and policy at USA Today. She also worked at the San Francisco Chronicle, The Financial Times in London and the Contra Costa Times in Walnut Creek, Calif. She serves on the board of the Association of Health Care Journalists and has a Master of Public Health degree.