Food Financials

February 27 2018

U.S. of Allergies: The Cost of Food Allergies in America

Robyn O'Brien Food Allergies, Food Financials 3

Next week, I’m doing a cooking segment for a TV show that targets families. The producer left a message last night, asking about how we can work some questions into the segment. It’s such an important conversation, and it got me thinking.

Today, 8 in 10 families are now purchasing some organic products. But less then 1% of our farmland in the U.S. is organic. That’s nuts, and what ends up happening is instead of supporting our own American farmers, we import what Americans are now eating. There is something called the Farm Bill that brings all of these issues to light. And our farmers need help there, to know that organic isn’t a fad or trend.

Why? Because food allergies, pediatric cancers, autism and other conditions impacting our kids aren’t trends either.

Private insurance claim lines with diagnoses of anaphylactic food reactions rose 377 percent from 2007 to 2016, according to a recent report.

The report, by FAIR Health, found that peanuts were the most common food specified to cause anaphylaxis, accounting for 26% of the claims. However, the largest percentage of claims were from a category titled “other foods,” accounting for 33%.

Eggs were 7%, crustaceans 6%, milk 5%, fish 2%, fruits and veggies 2% and food additives 1%.

The increase in claims was greater in rural areas (110%) than urban (70%) areas, challenging recent claims that food allergies were less common in rural areas.

The report also highlighted that food allergies are far more pervasive across age groups than previously understood. About 66% of claims were for patients 18 and younger, but 34% impacted those over the age of 18.

Add this data from 2007–2016 to the fact that the number of people with the peanut allergy in the United States more than quadrupled between 1997 and 2010 and it is obvious that we have a crisis.

Food allergies are not a niche, it is a growing epidemic that is challenging how we think about our food and how it is made. Genetic factors don’t change this quickly, environmental factors do. Are we allergic to food or to what’s been done to it?

Researchers report that the costs of food allergies, from medical care to food to pharmaceuticals is $4,184 per child per year, costing our economy $25 billion, including lost productivity.

Researchers reporting in the Journal of the American Medical Association states that the costs of food allergies, from medical care to food to pharmaceuticals is $4,184 per child per year, costing our economy $25 billion, including lost productivity.

To discount this condition in any way is irresponsible, but it is just one of the conditions that is triggering a food awakening around the country.

In the United States, we are quickly learning that our food supply contains a lot of ingredients that simply did not exist when we were kids, and that our own American corporations don’t use these ingredients in the products they sell overseas.

From artificial food dyes created in a laboratory to genetically engineered foods now regulated by the EPA as pesticides, we are finding our food supply increasingly hopped up on new ingredients. And if the market is any indication, a growing number of consumers don’t want it this way.

A recent study, funded in part by the peanut industry, stirred controversy when it suggested feeding peanuts to infants. A New York Times story profiled a lawmaker who “discounted the correlations between the rise in childhood allergies and the consumption of G.M.O.s.”

Both triggered an allergic reaction in 21st century consumers with this condition. 21st century consumers are looking for “free from” food: food that is free from ingredients like high fructose corn syrup, GMOs and artificial ingredients. Why? Because we are dealing with conditions and diseases in our families like never before. It is driving a food awakening. We are not saying that correlation is causation, we simply want food companies to dump the junk and the artificial ingredients from their products.

In the last few years, Target, Chipotle, Kroger, even General Mills and Cheerios have responded to this growing demand in the marketplace. In the last week, Pepsi, Tyson and others have responded, too.

They see the escalating rates of diseases, they feel the financial impact with their own health care costs, and they hear consumers that are saying they want to eat fewer fake, artificial and genetically engineered ingredients. While the chemical companies selling these new ingredients say there is no evidence of harm, consumers are saying: there is no evidence since these ingredients were never labeled in the United States. There are also no long term studies to show us that they are safe.

The potential of genetically engineered foods to cause allergic reactions is a big reason for opposition to these crops. It is also one of the concerns that led 64 countries around the world to label these foods for their citizens while 27 countries banned them entirely.

Introduced into the US food supply in the mid 1990s without labels, there were protocols put in place to ask questions about the allergy-causing possibilities, but there has been no test that offers definitive answers.

In other words, if you walked into an allergist’s office and asked if you were allergic to corn that has been in the food supply for thousands of years or if you are allergic to a new corn product, genetically engineered to produce its own insecticide and introduced into our food and now regulated by the EPA as a pesticide, there would be no test to give you that answer.

With no labels on GMO ingredients in the US to trace their impact and no test to offer definitive answers, the biotech industry is able to claim that there is not a single documented case of these foods ever causing harm.

With no labels on these ingredients in the US to trace their impact and no test to offer definitive answers, the biotech industry is able to claim that there is not a single documented case of these foods ever causing harm. Don’t ask, don’t tell.

But with the widespread introduction of genetically engineered ingredients into the US food supply, a frequently asked question is: Are rates of allergies higher in the United States than they are in other countries?

Previously, it was anyone’s guess.

But a study released in the Journal of the American Medical Association, says yes, living in the United States increases your risk of allergic diseases……“significantly.”

“Living in the US raises risk of allergies,” says the headline.

According to the research, living in the United States for a decade or more may raise the risk of some allergies, reports the Journal of the American Medical Association.

“These data indicate that duration of residence in the United States is a previously unrecognized factor in the epidemiology of atopic disease,” it said.

In other words, the longer you live here, the more likely you are to develop some kind of allergy, asthma, eczema or other related condition.

Food allergies have been skyrocketing in the United States in the last fifteen years. Not only has the CDC reported a 265% increase in the rates of hospitalizations related to food allergic reactions in a ten year period, but the sales of EpiPens, a life-saving medical device for those with food allergies, has also seen record sales growth according to the New York Times.

So what’s going on?

The study aimed to find out. Allergies reported in the survey included asthma, eczema, hay fever, and food allergies.

“Children born outside the United States had significantly lower prevalence of any allergic diseases (20.3%) than those born in the United States (34.5%),” said the study led by Jonathan Silverberg of St. Luke’s-Roosevelt Hospital Center in New York.

Let’s restate that:

Children born in the US have more than a 1 in 3 chance of having allergic diseases like food allergies, asthma or eczema, while kids born in other countries around the world had a “significantly lower prevalence” of 1 in 5.

On top of that, “foreign-born Americans develop increased risk for allergic disease with prolonged residence in the United States,” it said.

In other words, if you move here, your chances of developing any one or more of these allergic diseases increase.

The study went so far as to say that children born outside of the US who moved here showed “significantly” higher odds of developing these diseases.

What’s driving this? Is it really Purel and intense handwashing? And the hygiene hypothesis?

And are we allergic to food? Or what’s been done to it?

Because genetics don’t change that quickly, and the environment does.

“These data indicate that duration of residence in the United States is a previously unrecognized factor in the epidemiology of atopic disease,” it said.

This presents a risk not only to these children, but also to our economy, as the financial burden of these conditions and their associated health care costs impact not only families but also our country, our military and our productivity.

So what is triggering this escalating, US allergy epidemic?

According to Reuters report on the study and Dr. Ruchi Gupta, who studies allergies at the Northwestern University Feinberg School of Medicine in Chicago but wasn’t involved in the new research, “This is definitely something we see clinically and we’re trying to better understand, what is it in our environment that’s increasing the risk of allergic disease?” said

“Food allergies have increased tremendously,” she told Reuters Health. “We do see people who come from other countries don’t tend to have it.”

As discussed in a previous column, allergic reactions occur you’re your body perceives something to be a threat. They can also be a symptom of a hypersensitive immune system – our bodies armed and ready to launch an attack againstany perceived threat.

A growing number of doctors are also suggesting that food allergies might be a symptom that something is wrong with our food system. In other words, in light of the sudden explosion in food allergies: are we suddenly allergic to food? Or what’s been done to it?

Someone with food allergies has an immune system that perceives a food protein to be “foreign”, unidentifiable. And it launches an inflammatory response to drive out that foreign invader.

Today, we have new, foreign proteins that have never existed in our food supply that have been genetically engineered into our food. These proteins are so new that they have been patented by the United States Patent and Trademark Office and never before existed up until their introduction in the late 1990s and early 2000s.

Now correlation is not causation, but the concern over the unknown health impacts of these new proteins in the food supply is in part what led 64 countries around the world to label genetically engineered foods when they were first introduced fifteen years ago and 27 countries to flat out ban them.

According to Science Daily:

Genetically engineered crops are created by inserting a protein from a different organism into the original crop’s genome. This is usually done to create a plant that is more resistant to insects or diseases.

The Food and Agriculture Organization within the World Health Organization has a structured approach to determining whether genetically engineered foods cause allergies, according to Venu Gangur, MSU assistant professor of food science and human nutrition, who also is a faculty member in the National Food Safety and Toxicology Center. “But it has a major flaw. A critical question in that process asks, ‘Does the protein cause an allergic reaction in animals?’ The problem is that there has been no good animal model available to test this.”

It’s food for thought.

We don’t have labels on these genetically engineered foods in the US, at least not yet. Bipartisan legislation was recently introduced, and efforts have been made to urge the FDA to take action so that American consumers can enjoy the same freedoms enjoyed by consumers in over 60 countries around the world (including all of the member states of the European Union, Australia, Japan, the UK, Russia, China and India) and have access to whether or not their food and the foods they are feeding their families contain these genetically engineered ingredients.

Do we really want out slogan to be: Come to America, but don’t forget your asthma enhalers and EpiPens? We could quickly earn the title of the United States of Allergic Disease.

We are so much more than that.

Since genetically engineered ingredients are not yet labeled here in the United States. look for “Non-GMO” or “USDA Organic” foods which by law are not allowed to be produced with these new proteins. Chipotle took a bold move and announced that they are dropping these ingredients altogether.

With conflicting positions in the science, these ingredients need to be labeled. A food allergic reaction sends someone to the emergency room in the United States once every three minutes. European law dictates that any food containing more than 0.9% genetically engineered ingredients be labeled as containing GMOs. It’s a freedom to choose. Clean food is a right that should be afforded to all Americans, not just those who can afford to opt out and purchase foods labeled “non-GMO” or “USDA Organic”.

Mounting scientific evidence points to the role that our increasingly re-engineered food supply, hopped up on additives, artificial dyes, artificial growth hormones, record amounts of pesticides now recognized by the World Health Organization as a probable carcinogen and genetically engineered ingredients hardwired to be sprayed with them is having on the health of our families. The growing number of American dealing with food allergies and food sensitivities is an alarm bell that our bodies can no longer tolerate what has been done to our food.

The cost of food allergies is burdening more than just the families dealing with them, it’s burdening our schools, our health care system and our economy.

Food allergies are not a “niche,” just as cancer is not a fad.

It’s time to clean up our food, to get the junk out. So many big companies now recognize this and are responding to the needs of 21st century families.

21st century consumers are looking for food that is free from artificial ingredients and allergens. The companies that recognize this are seeing their market share and earnings grow.

Our kids are the compass.

kashi-trade-show-booth-expo-west-transitional-organic

February 20 2018

Kashi Delivers $1+ Million in Premiums to Support Farmers’ Transition to Organic

Robyn O'Brien From Robyn, Food Financials 0

The last few weeks, I’ve been in meetings with multinational companies who are now responding to the changing needs of American families. They recognize that demand for organic is no longer a fad or a trend and that consumers want transparency and to know what is in their food.

Organic is not a trend, because cancer, food allergies, diabetes, autism and Alzheimer’s aren’t trends. Inside all of these multinational companies are people who have family members and loved ones who are struggling with health issues. They know that the statistics are real.

So the personal is becoming the professional which is becoming political, and as these brands realize that less than 1% of our farmland in the U.S. is certified organic.

But the politics around food aren’t divided along traditional lines. Cancer doesn’t care if we are Republican or Democrat, autism, diabetes and Alzheimer’s don’t either. Health conditions are impacting all of our families, regardless of what side of the aisle we are on. And the line that has divided many companies between conventional and organic is blurring, thank goodness.

Perhaps one of the most remarkable examples of this is what Kashi is doing. They were acquired by Kellogg’s several years ago and largely left alone out in California, where they drove a revenue increase of 42% to $600 million in sales. Disaster only struck Kashi when Kellogg’s tried to re-engineer Kashi’s DNA, relocating the company’s headquarters to Michigan, changing the decision-making process and more. Sales tanked, morale plummeted, and the expression “to get Kashi’d” became something that no company wanted to experience in the acquisition process.

But inside of Kashi was a woman who stayed the course. She arrived in 2002, when the brand was still true to form, and she held onto that DNA despite the efforts to change it. As Kellogg’s realized their mistakes, they sent Kashi back to California.

A few years ago, under the leadership of this woman, the Kashi team contacted me after I’d been making a lot of noise about the fact that so many households are now buying organic, and that in spite of that, less than 1% of all U.S. farm acreage is organic. Those numbers don’t add up for any CEO responding to consumer demand, so the quick solution many companies turned to was importing organic ingredients. This hit me as a lost opportunity for American farmers. Why not grow it here?

So rather than wait for the government or the Grocery Manufacturer’s Association (which was fighting its own consumers in the GMO labeling debate) to do it, Kashi implemented a program to grow more organic in the U.S., to support American farmers in that transition rather than import it.

I’ve been asking the Kashi team for an update for the last few months, as I adore market-led solutions and specifically the fact that theirs enlisted the consumer. Well, the update finally arrived. This hit my inbox this morning:

Kashi unveiled that with the support of consumers, it will source Certified Transitional ingredients from more than 4,200 acres of U.S. farmland – a 400% increase since the Certified Transitional program started in 2016. Participating farmers have received more than $1 million to support their transition from conventional to organic.

“We’re proud to support thousands of acres of U.S. farmland transitioning to organic through the Certified Transitional program since its inception in 2016,” said Nicole Nestojko, Kashi Sr. Director Supply Chain & Sustainability. “When people enjoy a bowl of our new Cinnamon French Toast cereal – or any Certified Transitional product – they are helping increase the amount of organic farmland in the U.S., one box at a time.”

Growing the Organic Market

Despite double-digit growth in consumer demand for organic foods each year since the 1990s, organic acreage has not kept up.[1] According to the USDA, less than one percent of U.S. farmland is certified organic.[2] While farmers increasingly recognize the benefits of certification, converting fields from conventional farming methods to organic takes at least three years and is no small feat. During the three-year transition, farmers use organic practices requiring increased investment but aren’t paid organic prices.

Inspired to help farmers meet rising demand for organics, Kashi partnered with leading organic certifier Quality Assurance International (QAI) in 2016 to create Certified Transitional, a protocol that creates a new way for farmers to command slightly higher prices for their crops in transition during the three-year period – giving them the financial assurance they need to make the switch from conventional to organic. QAI led the development of the label, with support from agricultural suppliers, a global environmental NGO, organic experts, farmers, retailers, distributors and food brands.

QAI owns and manages the Certified Transitional protocol, which is available for any crop and brand that sources agricultural ingredients, including food and beverage.

Certified Transitional Farmers Received $1M in Premiums Made Possible by Kashi

Through the program, Certified Transitional farmers have received more than $1 million in premiums to support their transition to organic since 2016. A total of 15 farmers have supplied Certified Transitional ingredients from farmland in California, Colorado, Louisiana, Kansas, Nebraska and Wyoming.

By purchasing Certified Transitional products such as Cinnamon French Toast cereal, Chewy Nut Butter Bars and Dark Cocoa Karma Shredded Wheat Biscuits, consumers are voting with their dollars to help support farmers transitioning their land to organic.

“I like to consider myself a ‘conductor in an ecological orchestra’ because it’s important to me to ensure that all unique parts of the farm are working together in harmony,” said Eric Thalken, president at Burkey LLC, who supplied corn for the new Cinnamon French Toast Cereal. “That’s why I’m transitioning to organic – to ensure I conduct my farm in the most sustainable tune.”

These are the types of solutions that we can bring to the marketplace in real time, without waiting on the government. They are driving changes for our farmers, creating economic opportunities and jobs, which is a win win for the farm economy and U.S. economy. I sincerely hope that other companies will follow.

The picture above is from LivingMaxwell.com and taken at Expo West 2017. We are looking forward to seeing more solutions from companies on the trade show floor in a few weeks.

January 21 2018

Organic Food: Why the Price Tag & Is It Worth It?

Robyn O'Brien Food Financials, Real Food 0

Organic food is the fastest growing part of the food industry. It seems like everyone is now getting in on it.

So what, exactly, does the term “organic” actually mean?

The term “organic” actually refers to the way agricultural products are grown and processed and legally details the permitted use (or not) of certain ingredients in these foods.

The details are that the U.S. Congress adopted the Organic Foods Production Act (OFPA) in 1990 as part of the 1990 Farm Bill which was then followed with the National Organic Program final rule published by the U.S. Department of Agriculture (USDA).

The standards include a national list of approved synthetic and prohibited non-synthetic substances for organic production, which means that organically produced foods also must be produced without the use of:

antibiotics
artificial growth hormones
high fructose corn syrup
artificial dyes (made from coal tar and petrochemicals)
artificial sweeteners derived from chemicals
synthetically created chemical pesticide and fertilizers
genetically engineered proteins and ingredients
sewage sludge
irradiation

According to the United States Department of Agriculture, these added ingredients are actually what differentiate organic foods from their conventional counterparts. A Stanford study a few years ago concluded that there is little difference between organic and conventional food. But nowhere in that Stanford study, comparing organic food to conventional, were ingredients like synthetic pesticide, sewage sludge or any of the above measured. There was no measure of the insecticidal toxins produced by a genetically engineered corn plant, no measure of the added growth hormones used in conventional dairy, no measure of the fact that 80 percent of the antibiotics used today are used on the chicken, pork, beef and animals that we eat.

Food is not just a delivery device for vitamins and minerals, as measured in the study, but it is also used as a delivery device for these substances that drive profitability for the food industry. To fail to measure these added ingredients, while suggesting that there is essentially no difference, is incomplete at best. Some might even go so far as to suggest that it is irresponsible in light of the fact that we are seeing such a dramatic increase in diet-related disease.

Additionally, anyone who knowingly sells or mislabels as organic a product that was not produced and handled in accordance with the regulations can be subject to a civil penalty of up to $10,000 per violation. In other words, if an organic producer were to add any one of the ingredients listed above, they would be fined.

WHY ORGANICS COST MORE

Admittedly, the high price of organic food can irritate anyone. But the scrutiny that these foods undergo is enormous and expensive, driving prices at the cash register and for those producing them on the farm. Why the costs? Because the cost structure on our food supply offers taxpayer-funded resources called subsidies to the farmers using genetically engineered seeds and saturating crops in insecticides and weed killers, while charging the organic farmers fees to prove that their crops are safe.

That’s like getting fined to wear your seat belt.

So while conventional food production allows for the addition of cheap, synthetic and often controversial ingredients that have been disallowed, banned or never permitted for use in developed countries around the world, organic food carries the burden of having to prove that its products are safe—products produced without the use of added non-food ingredients that other countries have found controversial or removed from their food supply.

In other words, it’s an un-level playing field right now. And if we were all sitting down as a national family at our national dinner table, I don’t think that any of us would want to be using our resources this way. Wouldn’t we rather have the organic food be the one that we fund, making it cheaper, more affordable and more accessible to all Americans?

Or if given the choice, would we rather eat food hopped up on growth hormones, antibiotics and chemical pesticides? That’s a personal decision, a personal responsibility. We have to know what is in our food to make that decision.

And while correlation is not causation, in light of the growing rates of cancer, diabetes and other conditions affecting our families, the answer would appear to be “eat less chemicals.”

Food, clean from antibiotics, added growth hormones and excessive pesticide residue, should be a basic human right, afforded to all Americans, regardless of socioeconomic status.

But right now, the majority of the population does not have that choice. Food, clean from antibiotics, added growth hormones and excessive pesticide residue, should be a basic human right, afforded to all Americans, regardless of socioeconomic status.

The authors of the Stanford study concluded that the studies reviewed do not support what they call the “widespread perception” that organic foods overall are nutritionally superior to conventional ones, although eating an organic diet may reduce exposures to pesticides and antibiotic-resistant bacteria.

A Stanford press release quoted senior author Dena Bravata as saying, “There isn’t much difference between organic and conventional foods, if you’re an adult and making a decision based solely on your health.” (According to the Stanford Medical Center press office, Bravata is no longer doing interviews about the study.)

In one key finding, the team reported a “risk difference” of 30% between conventional and organic produce, meaning organic produce had a 30% lower risk of pesticide contamination than conventional produce. That number was based on the difference between the percentages of conventional and organic food samples across studies with any detectible pesticide residues (38% and 7%, respectively).

But the concept of risk difference is potentially misleading in this context, as the metric does not refer to health risk, according to Charles Benbrook, research professor and program leader for Measure to Manage: Farm and Food Diagnostics for Sustainability and Health at Washington State University. Furthermore, says Benbrook, “Pesticide dietary risk is a function of many factors, including the number of residues, their levels, and pesticide toxicity,” not just whether contamination was present.

Which is exactly what the video out of Sweden brought to light yesterday.

In a letter accepted for publication in the Annals of Internal Medicine, Benbrook pointed to the Stanford team’s lack of consideration of extensive government data on the number, frequency, potential combinations, and associated health risks of pesticide residues in U.S. food. Using data from the U.S. Department of Agriculture’s Pesticide Data Program,4Benbrook calculated a 94% reduction in health risk attributable to eating organic forms of six pesticide-intensive fruits.

The Stanford researchers also missed opportunities to examine the relationship of pesticides and health outcomes demonstrated in a growing number of cohort studies, says Brenda Eskenazi, a professor in the School of Public Health at the University of California, Berkeley. Eskenazi conducted one such study, one of a trio published in April 2011 that examined the relationship between cognitive development and prenatal pesticide exposures in two multiethnic inner-city populations6,7 and one farmworker community in California. One of the studies found deficits of seven IQ points in 7-year-old children in the highest quintile of pesticide exposure, compared with children in the lowest quintile, as measured by maternal urinary pesticide metabolite levels during pregnancy. Results were comparable in the other two studies.

In concluding that the evidence “does not suggest marked health benefits from consuming organic versus conventional foods,” many commenters, including Eskenazi and Benbrook, felt the Stanford team ignored risks to broader public health like those outlined in an April 2012 review by David C. Bellinger, a professor of neurology at Harvard Medical School. In his review Bellinger argued that subtle impacts of organophosphate pesticides on neurodevelopment can add up to substantial population-level impacts. He wrote, “It is frequently noted that a modest downward shift in mean IQ scores will be accompanied by a substantial increase in the percentage of individuals with extremely low scores.”

Conventional toxicology testing is now being shown to miss responses that occur at doses that are orders of magnitude lower than previously established no-observed-adverse-effects levels, with potential implications for our understanding of pesticide safety. And others are finding in animal studies that pesticide exposures in utero can induce epigenetic changes that alter stress responses and disease rates in future generations.

What are all of these pesticides in combination doing to us, to our families, to our children or during our pregnancy? The fact is: we need more scientific studies, and the video shared yesterday, like the Stanford study from a few years ago, speaks to that and opens the dialogue.

SO WHERE TO START?

Since the high price of organic produce and a flawed food system that continues to charge organic farmers more to prove that their products, produced without ingredients that mounting scientific evidence has shown to cause harm, is still an insurmountable hurdle to the majority of the population, especially the growing number of unemployed, where can an American who wants to avoid these ingredients start?

Start with baby steps. None of us can do everything, but all of us can do something. And thankfully, foods without these controversial additives and ingredients are increasingly sold in grocery stores like Wal-Mart, Costco, Kroger and Safeway, which represent the largest single distribution channel, accounting for 38 percent of organic food sales in 2006. Look for milk labeled “RbGH-free” or look for products without high fructose corn syrup or artificial colors. A growing number of companies, from Kraft to Nestle, are producing them, because their employees have kids battling conditions like asthma, allergies, diabetes and cancer, too.

So maybe you rolled your eyes at this whole thing a few years ago, dismissing it as an expensive food fad. I did. The Stanford study goes a long way towards reinforcing that. But read between the lines and exercise precaution where you can. Let your local representatives know that this matters to you, that you believe organic food should be the affordable option to families. Let your local grocery store know that you hope to see more in their aisles. They are listening, they are learning all of this, too. They have family members struggling under the burden of disease.

The love that you have for your family and country can propel you to do things you could never imagine. So navigate the grocery store a bit differently, get involved with a food kitchen, a community garden, a child’s school. And reach out to your legislators. They have families, too.

Because as the science continues to mount, from the Presidents Cancer Panel to the American Academy of Pediatrics, we are learning just how much the food we eat– and the artificial ingredients being added to it—can affect the health of our loved ones. So ask why. In light of the escalating rates of conditions and diseases in our country and around the world, it is one of the most patriotic things that we can do.

Sources:

Organic Food Conclusions Don’t Tell the Whole Story: http://ehp.niehs.nih.gov/120-a458/

Benbrook C. Initial Reflections on the Annals of Internal Medicine Paper “Are Organic Foods Safer and Healthier than Conventional Alternatives? A Systematic Review.” Available: http://caff.org/wp-content/uploads/2010/07/Annals_Response_Final.pdf

Bouchard MF, et al. Prenatal exposure to organophosphate pesticides and IQ in 7-year-old children. Environ Health Perspect 119(8):1189–1195 (2011); http://dx.doi.org/10.1289/ehp.1003185.

Engel SM, et al. Prenatal exposure to organophosphates, paraoxonase 1, and cognitive development in childhood. Environ Health Perspect 119(8):1182–1188 (2011); http://dx.doi.org/10.1289/ehp.1003183.

Rauh V, et al. Seven-year neurodevelopmental scores and prenatal exposure to chlorpyrifos, a common agricultural pesticide. Environ Health Perspect 119(8):1196–1201 (2011); http://dx.doi.org/10.1289/ehp.1003160.

June 22 2017

Dean Foods Acquires Uncle Matt’s Organic

Robyn O'Brien Food Financials 0

We just received this announcement from our friends at Whipstitch Capital. It comes on the heels of the Amazon+Whole Foods deal and suggests, once again, that the big brands see that buying into the organic food movement is the smartest way to grow. Dean Foods recently invested in Boulder-based Good Karma Foods and have now acquired Uncle Matt’s Organics. These smaller brands can now leverage the capital. distribution, R&D and more that comes from these bigger platforms.

Earlier today, Dean Foods Company (“Dean Foods”) (NYSE: DF) announced that it has acquired Uncle Matt’s Organic®, a leading organic juice company.

Uncle Matt’s Organic is the nation’s oldest organic juice company offering a wide range of organic juices, probiotic-infused juices and fruit-infused probiotic waters. Founded by Matt McLean, the real-life uncle to ten nieces and nephews, Uncle Matt’s Organic is committed to producing the highest quality juices, using only premium 100% organically grown fruit free from GMOs, synthetic fertilizers and pesticides.

“We have known Matt McLean for many years and we couldn’t be happier to provide liquidity to him and his family from this process and help set the Uncle Matt’s brand on the road to further strong growth,” said Michael Burgmaier, Managing Director of Whipstitch Capital. Nick McCoy, Managing Director of Whipstitch Capital, added, “Dean Foods has the ability, dedication and passion to build on the incredible growth that Matt and his family have achieved to date. Look out! The best is still yet to come!”

In fact, in addition to the brand, Uncle Matt himself – Matt McLean – will be joining Dean Foods to continue his leadership of the brand into the future. Uncle Matt’s Organic will continue operating the business out of its offices in Clermont, Florida, as a subsidiary of Dean Foods Company.

“Joining Dean Foods allows me to continue to nurture the brand I started nearly 20 years ago,” said McLean. “Our mission has always been to produce the highest quality organic juices. Becoming part of Dean Foods will allow us to bring organic to consumers at a scale that supports the organic farming community and increases consumer interests in organics.”

“The Whipstitch deal team – Nick, Mike, and Tim Sousa – was integral to this process every step of the way,” said McLean. “I met Mike at one of their trade show events many years ago and I knew he understood who we were, what we were doing, and how to position us. Whipstitch’s close relationships with senior executives at the large acquirers made a huge difference. Our family was pleased with Whipstitch and their depth of knowledge from start to finish of our industry and the market. Whipstitch guided us to a successful result.”

Robyn’s Note: Dean also recently invested in Good Karma Foods team here in Boulder. The only part of the food system that is growing is organics. Big companies are buying in, and the little brands get access to distribution and the capital they need to compete. Sadly, the system is so stacked against them. If we got to do it over, yes, I/wewould do it differently. But we work to help these smaller companies become a compass inside of the larger brands, in order to expand organic by investing in organic agriculture and farmland.

Currently, less than 1% of farmland in the U.S. is under organic agricultural practices. Demand far exceeds supply, with smaller brands limited in their ability to invest. Keep making noise, keep voting with your wallet. Every purchase sends a message to the food industry and farmers: 21st century consumers want organic food. #dumpthejunk

June 2 2017

Investors Rip Mylan’s Board, Calling for the Removal of Chairman & Others

Robyn O'Brien Food Financials, Food Politics 0

We’ve addressed the skyrocketing prices of EpiPens here since October 2015. We’ve been on the frontline of #epigate for over a year and half.

A few weeks ago, in an interview on Fox Business, I was asked about the jaw dropping paycheck given to Mylan’s chairman, Robert Coury. He received total compensation of almost $160 million in 2016.

My statement? “I think investors would be smart to do what Wells Fargo did, clean out that board and start over.”

This week, four pension funds that hold about 4.3 million shares of Mylan, the maker of Epipen, shares valued at $170 million, called for just that, an overhaul of 6 board members including the chairman. They also revealed something else:

“This controversy also caused investors – including several of us – to urge the Board to strengthen its oversight of Mylan’s drug‐pricing strategy and risks, requests that have been largely ignored.”

The letter itself is jaw dropping in that it suggests that Myan’s chairman relocated the company’s headquarters overseas, structured what is known as a poison pill, with the intent to avoid being acquired by Teva Pharmaceuticals. In the letter, the shareholders suggest that this was perhaps done with the intent of keeping himself on the payroll.

It begins:

“As long‐term Mylan shareowners, collectively holding about 4.3 million shares valued at $170 million, we believe the time has come to hold Mylan’s Board accountable for its costly record of compensation, risk and compliance failures….

Mylan’s Board reached new lows in corporate stewardship in 2016, when it agreed to make extraordinary and egregious payments in 2016 and over the next five years to Chairman and former CEO Coury. His compensation totaled $97.6 million in 2016 according to the Company’s Summary Compensation Table, which in some ways understates his total pay. Including vesting and payments triggered in part by inconsistent Board determinations, Mr. Coury received more than $160 million in 2016 (see Appendix). The added payments related in part to his third new compensation arrangement since he stepped down as CEO on January 1, 2012, while still remaining Chairman and – through 2016 – a Named Executive Officer (“NEO”).”

It turns out the company has 3 named executive officers (NEOs). Out of the 20 companies in their peer group, 15 only have one. The investors go on to state:

“In a year in which Mylan suffered significant reputational and financial harm as a result of its EpiPen pricing controversy and its shareowners suffered a negative 29.4% total shareowner return (“TSR”), CEO Heather Bresch and President Rajiv Malik felt no comparable financial pain.”

In a year in which more children lost their lives to a life-threatening allergic reaction, where families could no longer afford this life-saving device, many American families felt pain beyond anything that money can measure.

Please take a minute to read and share the letter. Mylan’s annual shareholder meeting is June 22. Please post your comments below the article or contact us directly, so that these shareholders know how many millions of Americans are impacted by this egregious behavior.

The letter is in its entirety below.

pdf_d530170px14a6n

March 28 2017

9 Important Legal Tips for Food and Ag Startups

Robyn O'Brien Food Financials, Solutions 0

In the last 6 months, I have been part of FoodBytes, a competition hosted by Rabobank, that brings the best and the brightest ideas in food+tech, ag+tech to the stage. In these competitions, the entrepreneurs not only pitch their business ideas, but they also are judged by a panel of judges and coached by a team of mentors. It’s an inspiring program that tackles some of the food system’s biggest issues.

One of the mentors, Chuck Cotter, an attorney with Holland and Hart, posted some great information for startups in the food and agriculture sectors. It’s valuable information for anyone starting out in this sector, and we hope you will both read and share it.

Startups in the food & ag industry face a host of unique challenges, including legal risks and compliance issues. We’re thrilled to have the legal experts at Holland & Hart on board as Official Sponsors of FoodBytes! Boulder, bringing years of experience in dealing with these kinds of challenges.

During FoodBytes! Boulder, our 20 pitch companies will meet with Chuck Cotter, Partner at Holland & Hart and head of the firm’s Food & Beverage practice, along with experts in the branding and finance sectors for a mentor session. Chuck will talk through potential legal issues the companies may face at some stage of their startup journey and give them recommendations on how to best handle them.

Holland & Hart will give the three winners of FoodBytes! Boulder a legal consultation to address the specific issues the startups are facing and give them guidance on how to navigate.

To give us a teaser of his wisdom (and sense of humor), we asked Chuck to share his top 9 tips for food & ag startups. Check them out below!

To meet Chuck and the rest of the Holland & Hart and FoodBytes! crew, join us in Boulder on Wednesday, October 26! Grab your ticket today.

1. Know Your Brand is Your Value

If you’re just getting started, make sure your company name is unique – meaning both protectable and enforceable. When you’re ready to start designing and printing packaging, for the love of Odin’s beard, do a trademark search before you begin. File your marks after they’ve been finalized and work with someone who knows how to maximize the value.

2. Avoid Friends and Family Rounds

Do NOT do it. Unless they are accredited investors or your last name is Musk.

3. Don’t be afraid to say “No.”

If you’ve got a great idea, a lot of people are going to want a piece of it. For a piece of your company, your cousin the Sanskrit professor thinks she can manage your production runs. Your uncle, the bank teller, thinks he can find you investors if you just cut him an ownership stake. Just say no.

4. Don’t Be Afraid to Say “Yes.”

This is a supportive community filled with lots of folks who will be willing to help you. Just make sure they know what they’re doing first.

5. Don’t Pay a “Finder” to Help You Raise Money

Just don’t – it’s stupid. When you’re big enough to get a legitimate investment bank to help you, then you can consider it.

6. Ask for references

Vet the people you’re going to work with, whether it’s your business partner, investor, co-packer, broker, consultant or anyone else involved. Do your due diligence!

7. Keep Things Secret (But Don’t Make it Weird)

You’ve got a great idea, probably the best ever in the history of the universe. I totally get it. Make sure you are protected by a non-disclosure agreement where and when it makes sense. Make sure your agreements with food scientists grant the resulting recipes to you. Make sure your co-packing agreement protects your recipes and formulations. But don’t be the nut job asking for an NDA at the bar at every startup competition.

8. Be Kind and Decent, Always

No matter where you are in the growth cycle, be kind and decent to everyone. First, it’s the right thing to do. It’s a collaborative industry and that makes it fun. Second, appearances can be deceiving. The person you’re blowing off now may be the serial entrepreneur who nixes an investment in your company a year from now.

9. Don’t Sell Equity Early

That is, unless you have no other option or unless the valuation is great. Or, you know, they swear they love you for your mind. Convertible notes and other debt options can be a founder’s friend.

Want more tips? Join Chuck, Holland & Hart and the rest of the FoodBytes! team in Boulder! Tickets are moving fast, so snag yours today!

March 13 2017

The Future of Food: What’s On Trend and What’s Out at the Industry’s Biggest Show

Robyn O'Brien Food Financials, From Robyn 2

This past week, the food industry gathered at Expo West 2017.

Denise Morrison of Campbell’s and Kathleen Merrigan, former USDA leader, keynoted Expo West, the natural and organic industry’s largest conference. That’s how far we’ve come—the future of food has a new look to it, and it’s decidedly powerful, with some strong female leads.

This year’s food show was packed, with 77,000 of your favorite foodies, funding vehicles and farmers.

The theme of the show definitely had a food+tech angle, with Campbell’s CEO, Ms. Morrison, talking about the incredible game-changing role that technology is having on our health. From personalized nutrition to the number of people checking online for recipes, to Amazon’s massive disruptive impact on the retail sector. Tech is playing a huge role.

Since 2010, 400 startups have received $8 billion in funding across the food eco-system. The space is just getting started. Almost 20% of our GDP is spent on managing disease and health care. Food can do so much of that, once we figure out better nutrition.

And that is what was on display this year. Sugar was out. It’s the new tobacco. Smart investors aren’t adding it to their portfolios.

What was in? Any beverage that is clear, with low to no sugar. These drinks are displacing Coke and Pepsi – from teas to kombuchas (which were on tap, like siding up to your favorite bar). Old school soda is in a death spiral. You wouldn’t want to be in charge of their P&L with the innovation that is happening in this space. You would want to be in charge of acquisitions, because it is the only way the beverage industry is going to grow. Kroger has proven that with their Simple Truth line – their brand that is free-from additives, GMOs, artificial ingredients and more – launched in 2012. Within 4 years, it hit $1.7 billion in revenue.

So what else was happening? The trends included:

Low sugar
Plant-based
Non-dairy
Gluten-free
Non-GMO
Fermented foods
Snacking (it’s an $89 billion market)

The first day, I walked the floor with a friend who is producing Mark Bittman’s podcast and with Mark Bittman of the New York Times. I wish we’d had a microphone on Mark. His running commentary was hilarious. Just because we can invent certain things in the food industry, doesn’t mean that we should.

The question for innovators and entrepreneurs to ask is: Does this heal or hurt my consumer? I’ve shared the data thousands of times, but once again, here it is:

1 in 2 American men and 1 in 3 women are expected to get cancer in their lifetimes.
1 in 3 kids now has allergies, autism, ADHD or asthma
1 in 2 minority kids born in the year 2000 are expected to be insulin dependent by the time they reach adulthood, and 1 in 3 white kids.
2 out of 3 Americans are battling obesity and weight issues in a serious way.

You can’t just innovate for innovation’s sake. Just because you can do something doesn’t mean you should. Sorghum in chocolate? Not sure anyone is looking for that. But a kids’ supplement full of the heart-boosting, stress busting mineral magnesium, like Natural Vitality’s, now that makes sense.

There’s a lot that I loved about this year’s show and some that I didn’t. It very much is beginning to feel like the tech bubble of early 2000, where the space got so hot that everyone wanted in. I remember siting on the desk when those companies rolled through. It was pretty easy to quickly determine who knew what they were doing. The problem back then that I also now see in the food industry is uneducated capital, and people in it solely for the exit strategy.

Mark Cuban says, “Don’t start a company unless it’s an obsession and something you love. If you have an exit strategy, it’s not an obsession.”

No one lives and breathes this more than John Foraker, the head of Annie’s, and this year, he was recognized for his incredible role in the industry with an award. He took Annie’s public, successfully navigated the sale and transition of the company into General Mills, and is now also leading their Cascadian Farms division. He is one of my favorite people to see because his intellect, passion and ambition to change the industry are unparalleled. Cascadian Farms just joined Patagonia and the Land Institute to address soil erosion, greenhouse gas emissions, fertilizer runoff and more with an investment in Kernza, a new grain. When the history books are written on how we fixed our food system, his name will take up many chapters.

The best leaders, like John, know that the space is hot. They also know, like my friends at Back to the Roots, that unless you can manage your supply chain, secure your ingredients and provide transparency to your consumers, you’ve got a short fuse. This space is not easy. The supply chain issues are not easy. The liability is huge.

Transparency is the first ingredient in the recipe to earning consumers’ trust. The CEO of Campbell’s said that, and it is profoundly true.

The age of trying to tell her how to think, what to think, when to think are done. The consumer is thinking all of the time, because she is now managing either a life threatening food allergy, celiacs, diabetes or even cancer in her household. In many cases, she is managing multiple conditions. This puts her need for medications directly in conflict with her desire to invest in better for you brands. Brands like MegaFood are stepping in to help.

Brands like Schar, a gluten free bread company out of Europe get that. The founder, in his 60s, is a scientist at heart, engineering the best possible product for those dealing with Celiac Disease. And while the old school packaging does not convey the love and passion in the brand, make no mistake, it is there.

Brands like Health Warrior also know that they have to secure their supply chain to meet their numbers. If the demand is there but the ingredients aren’t, they’re screwed. So they’ve launched a Kickstarter to shine a light on their sourcing. It’s innovative, transparent and true. This is one of my favorite brands right now. Smart fuel for people getting smart about food fuel.

Creamy nut fillings are beefing up the protein profile of products, from Made in Nature to Clif Bar. High quality peanut butter is very much in. Brands like Good Spread are laying it on thick, raising awareness of malnourishment around the world, with one of the highest quality peanut butters on the market.

Sugar is out. Once we know better, we do better. And companies are shifting away from the white stuff. Investors are, too. If it’s already in their portfolio, fine, but they aren’t adding it. It’s the new tobacco. We now know what it does to our health, and responsible companies and investors are opting out.

What I love most are the alums in the food industry. Those that are constantly evolving, like the guy who founded Pirate’s Booty. He’s back with Vegan Rob’s, a snack line that is both nutrient dense, gluten-free and vegan. Do less harm. He’s so dialed into the industry, he’s someone you can look to as the compass. He knows what ingredients are hot and which ones to avoid. He knows that to be successful, you have to know the answer when asked: Does your product hurt or heal?

You can feel the success of the organic industry by the fact that Campbell’s CEO gave the keynote on the state of the industry. She’s in and had every reason to be on that stage because she broke with the status quo that the Grocery Manufacturers Association tried to maintain, and moved with her consumers, calling for mandatory, on package labeling of GMOs. She spoke about her desire to be the biggest, small food company, one that is a portfolio of many better for you brands. She also spoke about personalized nutrition, leveraging data and apps and technology, spun around and shared that their app, Habit, helped her lose 18 pounds.

There was something so real in that moment—her authenticity said: we are in this together.

We are. We are all Americans before we break into Republicans or Democrats. We are all eaters, before we break into conventional and organic.

Perhaps the most significant issue is the one that my brilliant friend, Matthew Dillon of Clif Bar shared: farmers no longer own their land. In many cases, they are on leases with payments due to landowners who know little to nothing about the soil or land management beyond the balance sheet. That presents an acute problem in financing the growth of the organic industry. Tenant farmers who are not land owners don’t have the financial flexibility needed to make the long-term decisions. So how do we refinance the farm?

Less than 5 million of the over 900 million acres used to grow food in this country are organic. Less than 1%. Kashi is trying to tackle it with a certified transitional program open to anyone. Nature’s Path, with its extraordinary integrity, is trying to do it, too. There is a long list of companies, from Costco to White Wave, with their focus on this. Regenerative agriculture is also a buzzing term in the industry. How do we heal the soil?

But this event needs a call to action around this.

So next year? Let’s leverage the almost 80,000 people on that trade show floor and send a message: with the growth in the food industry coming almost exclusively from this category, we have to finance the farmers’ conversion to organic. From leasing issues, to storage and holding tanks, to delivery of commodities, how do we build that system?

It’s the future of food, and we have to finance the future from the farm to the fork. It’s a line on the balance sheets that we have to get straight.

What isn’t linear is the curve of the heart found in this industry and the passion. Food is sensual, sensory and serves a powerful role in our health. It’s the kombucha on tap on show on the trade show floor – fun and irreverent. It’s the turmeric tucked into snacks and in supplements, tackling inflammation to help you feel better and do more. It’s the liquid snacks out of Garden of Life, protein shakes, organic, certified, B-corps.

There is so much love in this industry and so much passion. A mother protecting her baby, a husband protecting his wife. It’s the rocket fuel.

Companies that take care of consumers the way you’d take care of your own family are winning. If your brand radiates that, you’ve got your rocket fuel for success. Tap into it, foster it.

Food is so deeply personal. We’ve come out of the age of industrialized, processed food, thank goodness.

The future of food is no longer one-size-fits-all. It’s about personalized nutrition and meeting the changing needs of the 21st century family.

January 28 2017

Nestlé Uses Cancer to Sell a Product Linked to Cancer

Robyn O'Brien Food Financials, From Robyn 4

In this disturbing commercial Nestlé’s Coffee Mate brand tries to use sympathy for a cancer patient to sell its artificially coffee creamer product that contains ingredients that have been linked to cancer.

The Mayo Clinic recommends that consumers avoid some of the ingredients on the nutritional panel, and the FDA is also taking measures to remove some of these ingredients from our food supply.

One of the top ingredients listed in Nestlé’s creamer product is hydrogenated oils. Another ingredient of concern is carrageenan which has been linked to cancer.

The FDA has found that trans fats like hydrogenated oils are no longer generally regarded as safe and the agency is taking measures to eliminate them from the food supply.

It is absolutely stunning that Nestlé used a cancer patient in the ad in light of the evidence below.

Info on hydrogenated oils and trans fats from the Mayo Clinic are below:

What is trans fat?

Most trans fat is formed through an industrial process that adds hydrogen to vegetable oil, which causes the oil to become solid at room temperature.

This partially hydrogenated oil is less likely to spoil, so foods made with it have a longer shelf life.

Trans fat in your food

The manufactured form of trans fat, known as partially hydrogenated oil, is found in a variety of food products. Nondairy coffee creamer and stick margarines also may contain partially hydrogenated vegetable oils.

Reading food labels

In the United States if a food has less than 0.5 grams of trans fat in a serving, the food label can read 0 grams trans fat (as Nestle’s creamer does). This hidden trans fat can add up quickly, especially if you eat several servings of multiple foods containing less than 0.5 grams a serving.

When you check the food label for trans fat, also check the food’s ingredient list for partially hydrogenated vegetable oil — which indicates that the food contains some trans fat, even if the amount is below 0.5 grams.

Carrageenan

According to the Cornucopia Institute, an organization which has been a major driver of removing this ingredient from milk and milk-like products:

“Since 1969, dozens of studies of food-grade carrageenan have been published in peer-reviewed academic journals. Results from these scientifc experiments point to harmful effects from food-grade carrageenan in the diet.

“Studies from the 1960s, 1970s and 1980s link food-grade carrageenan to higher rates of digestive disease, including colon cancer, in laboratory animals.

“In 2001, a review published in the official journal of the National Institute of Environmental Health Sciences questioned the safety of food-grade carrageenan, based on an examination of the extant scientific literature.

“The unique chemical structure of carrageenan triggers an innate immune response in the body, which recognizes it as a dangerous invader. This immune response leads to inflammation. For individuals who consume carrageenan on a regular or daily basis, the inflammation will be prolonged and constant, which is a serious health concern since prolonged inflammation is a precursor to more serious disease.”

So Nestlé is pushing a product full of potentially cancer-causing ingredients, using the story of a cancer patient. I’ve never seen such an offensive approach in advertising. It’d be like using an obese child to sell soda.

Please think before you drink this product.

If you are diagnosed or battling cancer, please read all labels in order to protect your health and look to organizations like the Anti Cancer Lifestyle Program and the Anti Cancer Diet by Dr. Joel Fuhrman to learn more.

October 13 2016

Food Allergy Risks: One Autoinjector or Two?

Sarah Chapman Food Allergies, Food Financials 0

As the #epigate crisis hits American families, families in the UK find themselves battling their own issues when it comes to carrying a life-saving device. We are very grateful for our friend and colleague, Sarah Chapman, winner of the Allergy Hero UK award, for this article and her work to keep food allergy families safe.

This is the new and disturbing guidance that has been announced by the British Society for Allergy and Clinical Immunology (BSACI) at their annual meeting this September. Their proposal to change, for those qualifying as being at low risk of requiring a second auto injector, to only have prescriptions for one.

This directly contradicts all previous advice given to those at risk of anaphylaxis, and the Regulating Medicines and Medical Devices Agency (MHRA) still advise patients to carry two. The two main allergy charities in the UK, The Anaphylaxis Campaign and Allergy UK continue to recommend that we follow this guidance from them.

On examining the guidance from BSACI the qualifying statements have created a storm of controversy with the allergy community on social media.

This guidance for children of school age recommends that one auto injector for school and one for home with the following exceptions: obesity, far from medical help, or previously had a life threatening reaction or if previously required the use of two auto injectors.

The guidance for adults explains that the “carrying of adrenaline long term is not required if the trigger can be avoided, even if previous reactions were severe, for example oral prescription drugs, or when food can be avoided.”

In response to this new expert advice has not been received well by those on social media, and in response a new hashtag has now been started #carrytwo it is rapidly gaining in campaign style with many horrified parents and adults with allergy making their feelings known. Many are scathing of what they consider to be a blatant attempt to cut the NHS costs for auto injectors.

Patients in the UK face many difficulties in getting medical support for allergies and feel that it is ironic that the very people who wrote the Unmet need in 2005 (published from the Royal college of physicians explaining the poor care for the allergy community within the NHS) have also published this new carry one advice.

Fear has rapidly been felt at the idea that a reaction may not be halted with one auto injector, when faced with a long wait for medical support. There can be long delays during peak times for ambulances to arrive. Misuse of an autoinjector, fingers in the way or not holding to the thigh long enough for the epinephrine to enter the body, are anecdotally reported.

The very idea that food allergens are easily avoided is regarded as nonsense by many on social media, those who live with allergies have reactions despite continued attempts to avoid.

Many comment that the only reason they live the a normal life is because they have two auto injectors with them at all times. As a parent who has a now adult son with many allergies who had a near miss last year and needed both his jext pens to save his life, I feel that the only reason my son is alive is because of those two jext pens. His previous reactions only required one.

I urge everyone to globally support the #carrytwo campaign, and give personal examples when your auto injectors were needed. There is a dual benefit, support our wish to change this new guidance and firmly get #carrytwo embraced in everyone’s minds. It also will underscore as a reminder to everyone to carry their auto injectors! A plus for everyone! Remember #carrytwo and link #BSACI feel free to follow Sarah Chapman @sarahjchapman on twitter.

Link to the BSACI

http://onlinelibrary.wiley.com/doi/10.1111/cea.12788/full

https://assets.publishing.service.gov.uk/media/54730805ed915d1380000045/con418524.pdf

October 7 2016

Seven Reasons Why the Epipen Crisis is Grimmer than You Know

Jill Negro Food Allergies, Food Financials 0

Guest article written for RobynObrien.com by Jill Negro.

By now, you may get a little sick to your stomach hearing about Mylan’s wrongdoings. Well, it is even worse than most media is likely aware of, and has reported. I am a mom of two boys who require Epipens for nut and egg allergies. They need, at bare minimum, one for home and one for school, each. We spend thousands of dollars on Epipens each year. Yes, this is with insurance. Yes, this is with Mylan’s “free Epipen” coupon. Yes, this is including the new “$300” coupon. Yes, our insurance does cover them—but, subject to our $5,200 deductible. Yes, this is typical of most families with food and other allergies.

I also happen to have a background in health insurance and am, unfortunately, intimately familiar with Epipen price gouging and its impact on the many families like mine. It is ironic that I am Mylan’s target market. And I am also the mom crying at the pharmacy because we can’t afford our children’s prescriptions.

Now that we got that out of the way, here are a few important facts you’ve likely not have read or known:

1. The patient assistance program does not apply to most patients. Mylan’s initial response to this crisis, and make no mistake, it is, indeed, a crisis, despite what Mylan would like you to believe, was to increase the patient assistance program income eligibility limit. I had a glimmer of hope. Until I read the fine print: “The patient must not have prescription insurance coverage through Medicaid, Medicare Part D, TriCare, a qualified health plan purchased on a state-based, partnership, or federally-facilitated Exchange, or any other public or private program or insurer. Verification documents will be required.”

Did you catch that? Mylan is touting the patient assistance program as an answer to the problem of patients and parents with high deductible health plans who can’t afford Epipens for themselves or their children—yet, people with any health insurance, high deductible or otherwise, are not eligible. Since the uninsured population is quite small these days, this “assistance” actually applies to very few (if any).

2. The new, $300 coupon, available for “certain people” expires in less than three months. Mylan has not said whether the coupon will be available beyond the December 31, 2016 expiration date or not. Are they simply hoping the bad press blows over by then? My own family won’t even be able to actually use the coupon because we need to refill our script in January, in order to get the longest time with our Epipens before having to shell out thousands more again next January.

3. The $608 wholesale acquisition cost you see in the media is actually hundreds less than what most patients are paying. Customers pay retail, not wholesale. According to many upset moms across the country I’ve heard from, the costs are now much closer to $800 and up. The Mylan CEO said very little to clarify this, other than indicating in a prepared statement that a “minority” of customers may have paid wholesale acquisition cost, or more. She did, arguably purposefully, not distinguish just how much more that cost really is.

When I last called our local pharmacy, they quoted $743 per box. In order to make sure we have coverage for both of my young kids at home, preschool, and activities we need four boxes, at absolute minimum, and realistically six, if we want to be sure there is one available at all times wherever they are. Next year, when my older son starts elementary school, I’m told that if he wants to play any sports another, separate Epipen is a requirement. If you’re counting, that’s $4,458 for the six boxes we need to keep my kids safe. This is a yearly expense.

Even if Mylan extends the $300 coupon beyond December, it still only brings us back to what we last paid in June, nearly $500 a box. And it is still thousands more than what my family, and most families, can afford.

4. When the $300 “generic” Epipen comes out, no one knows how, or if, it’ll be covered by insurance. Also, for the majority of families who need multiple Epipens for multiple children, this is still thousands of dollars. In addition, it is an extremely high price for a “generic,” off-patent drug. By all accounts, we are talking about a very old, dirt cheap medication housed in a device created by government funded dollars 40 years ago.

Mylan continues to cite “increased awareness” as a reason for their astronomical increases: But is it awareness or advertising? I certainly did not need to be made “aware” that my 11 month old broke out in hives at a restaurant, or that my nephew had trouble breathing after a mild exposure to peanut residue. Our allergist was prescribing Epipens long before Mylan acquired the drug from Merck. They cite increased Epipen prescriptions as proof of this “awareness” without noting that the prevalence of food allergies in children has also been increasing to now 1 out of 4. This is a statistic that Mylan is capitalizing on.

Bresch also loves to talk about the “free Epipens for schools” program, although it does nothing for families who have children with documented allergies who are required to have their own, current prescription, in their own names, in order to even be able to attend school. As Senator Blumenthal indicated in his press conference, you can’t require schools and parents to purchase Epipens and then price gouge them on it. He correctly noted that Mylan is taking advantage of the 2013 law that they lobbied for. While I am certainly happy that schools must stock emergency Epipens, and that they must provide staff training, subsequently increasing the Epipen cost beyond what my family can afford is forcing us to choose between our children’s most basic needs and their Epipens. What would you choose?

Additionally, the “enhancements” to the device mechanism, basically that the needle is covered after injection, has turned out to likely be a minimal investment, according to experts.

Mylan also states they’ve had costs from researching how to extend the shelf life. And lo and behold, they’ve been successful in doing so…but why did it take a congressional hearing for anyone to even hear about this breakthrough?

5. The shelf life for the actual patient is 4- 6 months less than what Heather Bresch admitted, under oath. In the congressional hearing, Bresch stated that the shelf life is 18 months. What she neglected to clarify is that by the time patients pick up an Epipen from the pharmacy, there are usually only 12 of those 18 months left, sometimes less. I’ve never gotten more than 13 months out of our Epipens, and I always ask for the latest expiration available. I feel Mylan intentionally misled congress by saying 18 months and not disclosing the lag time between when the Epipen is manufactured, and when we can pick it up, leaving us one year. In fact, I have a friend who recently only had 6 months before having to buy new Epipens for her 2 year old son.

6. This direr crisis applies to the majority of people with life-threatening allergies. A huge point of frustration for many moms in food allergy networks across the country is Mylan’s insistence that “most” people get Epipens for $100 or less, or even free. In fact, Mylan likes to estimate 85% of consumers, yet no one knows where this number is coming from, or how it could possibly be true. It is certainly not true for the vast majority of my friends’ families, nor the majority of moms I’ve spoken to who are crying out for help. It also does not take into account the many people who leave their Epipens at the pharmacy because they can’t afford them. I alone have three friends who have sadly done just that. They are taking a gamble on their lives. All three are moms.

Importantly, there are also most likely many people who simply wait to fill Epipens until they’ve met their $5,000, or $6,000, or $10,000 deductible. I’ve done this myself. Why? Because we can make payments to our doctors and hospitals. Epipens require thousands of dollars of cash, up front. Why is this important? Because many of us are keeping expired prescriptions at home until we meet those deductibles, or until we can afford to buy more. And again, this puts our children’s lives at risk. The situation is much grimmer than Mylan would like you to believe: My friends and I are risking both our and our kids’ lives—because we simply have no choice!

Further, even if your Epipens are well-covered by your insurance plan that cost is most definitely coming back to you, whether you realize it or not, or whether Mylan admits it or not.

7. Bresch testified, falsely, under oath that the increased cost to insurance plans for people who are lucky enough to pay only a copay for their Epipens would not subsequently come back to consumers with an associated increase in health insurance premiums. That is exactly how insurance works: Healthcare costs go up, premiums and rates go up—or cost sharing, i.e. deductibles and coinsurance and copays, go up. While I do have 10 years of experience in health insurance, this is not exactly an industry secret, but common knowledge, which also happens to be frequently reported on. Did Bresch really not know this as CEO of a major drug corporation?

Let’s give the benefit of the doubt and simply think about it for a minute. What happens if you’re in a car accident? Multiple car accidents each year? Do your car insurance premiums go up or down? Do people purposely avoid putting in car insurance claims to avoid an increase in their insurance costs? Why, yes, they do. Having multiple children with food allergies who require multiple Epipens per year is like having 4-6 accidents per year, every year, year after year…most likely for the rest of their lives. Except what just five years ago was the equivalent of a fender bender, is now like being rolled over five or six times per year by a Mack truck, through no fault or choice of one’s own.

To be fair, while having one, or even a few, increased costs won’t necessarily cause a sole individual’s premium to go up, higher claim costs DO cause increases in premiums; it’s just that it’s not only for you, but everyone covered under the plan–most especially since these are predictable, yearly expenses. Does that make price gouging better? No. It simply means we are ALL paying. And some of us twice because we are also taxpayers paying for services such as Medicare, Children’s Health Insurance Programs (CHIP), and Medicaid. How do you like them apples? Are you outraged, yet? Because if you’re not, you should be.

Offering a $300 “generic” for some, while forcing others—insurers and the government—to pay $700-800, absolutely causes premiums and rates, and/or copays and deductibles, to go up for EVERYONE. The insurer will not simply absorb that cost increase out of the kindness of their hearts. After all, they’re indebted to their shareholders, too. And do you suppose that any company in America can, and would, and even should, absorb the skyrocketing cost from blatant price gouging? Would you be happy to know that if not passed onto you, it must come from somewhere else? Perhaps your bonus? Perhaps your salary? Perhaps your job? Or would you like to instead sacrifice your child’s life?

What options do we have? I was recently invited to share my family’s story on Dr. Oz, and he talked about one alternative: generic Andrenaclick. As you can see, GoodRx coupons for Walmart are, hallelujah, currently about $144 per box. However, this appears to be without insurance. If I’m paying about $700 out of pocket, I would want it to be applied to our deductible so that it is not an added cost on top of the $5,200 we pay out of pocket, but it’s still clearly a huge relief and improvement over paying $4,000 or more all at once. And while it’s unclear at this point if the generic Adrenaclick is an option for our family, since I need to talk to our doctor, you better believe I don’t want to give Mylan any more of our money.