Why are EpiPens so Expensive?
August 28, 2016 2 Comments
The outrage of the week is the exorbitant rise in the cost of the EpiPen Auto-Injector. Predictably, the progressive left immediately jumped into full battle mode and trotted out its favorite boogie – capitalism. And just as predictably, they are looking to government to fix it.
The price to cash-paying customers for EpiPens is up some 600 percent to 700 percent over the past decade, with cash customers paying as much as $840 for a two-pack – though coupons are available that would bring the price down to around $650. (Hoping to dampen criticism and head off congressional hearings, Mylan announced yesterday it would begin offering a savings card to reduce the cost by as much as $300.) This is for a $2 ($4 for a two-pack) dose of medicine – a medicine available in Canada for about $100 without a prescription.
So EpiPen maker Mylan is coming under the scrutiny of the congressweasels – although that scrutiny has been tempered by the revelation that Mylan’s CEO Heather Bresch is the daughter of Senator Joe Manchin (D-W.Va.). Over the last several days, Senators Chuck Grassley, Amy Klobuchar and Richard Blumenthal and Representative Elijah Cummings and others have called for information, investigations and explanations from and of Mylan. Klobuchar and Blumenthal are calling for price fixing – a form of collectivism that always fails and leads to shortages and more corruption.
If that’s where they’re looking, they’re looking in the wrong place.
In the years 2012 and 2013, Mylan spent about $4 million lobbying Congress and the Food and Drug Administration. The result is a defacto monopoly on epinephrine injectors. The FDA’s rules require companies with competing injectors to exceed the specifications required by Mylan, and so far the FDA has killed or stymied almost every potential competitor that’s come along. One epinephrine injector allowed into the market is dubbed “inferior” and rarely prescribed.
In 2013 Congress passed the School Access to Emergency Epinephrine Act that provides schools with financial incentives (read money from the federal treasury) to stock epinephrine injectors in case of emergency. The approved injectors are EpiPens, of course. The primary lobbying group pushing the bill was the group Food Allergy Research & Education (FARE). The primary corporate sponsor of FARE is Mylan.
EpiPens have an FDA-mandated one-year expiration meaning, whether used or not, patients are cowed into tossing their old ones in the trash and replacing them and the doctors write new prescriptions each year. The government, through Medicare and Medicaid, pay whatever Mylan decrees the price to be, sans applicable deductibles.
You see what has happened here, I think. They came up with a good idea, and then they got the government to guarantee a monopoly by regulating all others off the market and then mandating a short shelf life (which may or may not be justified) thereby continuing the sales momentum.
Nothing even vaguely capitalistic about the whole story, it’s simply a matter of using government to promote your product. EpiPen may be the greatest thing since canned beer, or the worst since Nero bought a fiddle. I simply don’t know. What I do know is that if there were three, or five, or thirty competing models from various companies, you’d be unlikely to be paying $840 for a two-pack, and doing it every year.