EpiPen Price Scandal Reveals Larger Problem of Runaway Drug Prices

By Daily Editorials

September 2, 2016 4 min read

The Great EpiPen Pricing Scandal of 2016 will be good for the St. Louis economy. The new generic versions of the epinephrine injection devices will be made at Meridian Medical Technology facilities in Brentwood and Maryland Heights, just like brand-name EpiPens are.

It's bizarre that Mylan NV, the same company that owns EpiPen, would commission an identical generic version of the same product and sell it for half the price. After all, Anheuser-Busch InBev wouldn't make half-price generic Budweiser at its Pestalozzi Street plant.

But the pharmaceutical business plays by different rules. It ruthlessly eliminates competition. It often collaborates with insurance companies and pharmacy benefits managers, the entities that are supposed to restrain it. It has co-opted much of the scientific research community and Congress.

The EpiPen pricing scandal — a six-fold price increase since 2007 — is a useful guide for consumer activism. Nothing places a harsher public light on greed than when people can't afford to buy an EpiPen — the only way to stop a life-threatening allergic reaction — because a corporation is trying to squeeze out higher profits. It shines a light that cuts through a lot of deliberately obfuscatory fog and reveals this fundamental problem: The United States, alone among industrial nations, doesn't regulate the price of vital prescription drugs.

At the risk of saying something nice about Heather Bresch, Mylan's embattled CEO, she was absolutely right Aug. 25 when she told CNBC: "This isn't an EpiPen issue. This isn't a Mylan issue. This is a health care issue. The irony is that the system incentivizes higher prices, and it's the conversation that no one has wanted to have."

The more expensive a drug is, the more profit there is for everyone who touches it before the customer does: the company that makes it, the insurance company, pharmacy benefits managers, drugstores. There's more money to underwrite research and fly doctors to Bermuda for conferences. More money for TV ads to convince people they need it. More money to contribute to political campaigns.

Sure, you can jack up the price of a drug that treats a rare disease by 5,000 percent — as the infamous Martin Shkreli did last year — but it's even better when you've got the only treatment for common afflictions like allergic reactions.

Seniors, who rely on more drugs than younger populations, have seen prices for commonly prescribed drugs double in the last decade. State and federal budgets that pay for these drugs are under stress. It's not enough to keep passing higher costs onto insurers, who pass them on to customers, or work out "discounts." It's not enough to create a generic to diminish a public relations fiasco.

Americans must insist that Congress bypass its big contributors and regulate drug prices set by virtual monopolies. You can't maximize private profits and the public's health at the same time.


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