If we raise the price on the Epipen product, will the health insurers cry foul?
No?
Let’s try again, and again, and again, and again. Doh!
Busted.
At the end of the food chain is the end consumer, i.e. the people who count on this life-saving product. As long as we were not paying anything extra out of pocket, why should we care?
Folks. This logic is the thinking that is causing insurance providers to continue to hike premiums while reducing coverage. As my mother also said, there is no free ride.
Trust your pharma company to price fairly?
Isolated incident? Not likely. This Epipen pricing scandal comes on the heals of the Turing Pharmaceutical outrage last year. For those just tuning in, the cartoonish villian CEO Martin Shkreli of Turing raised the price of Daraprim from $13.50 a tablet (not cheap) to $750 a tablet (wtf?) overnight. If there is an opportunity to grab profits while insurers are asleep at the wheel for a well-known product like the Epipen product, are we to believe this is one isolated case of one rouge drug company? More likely this is a case of the one gluttonous roach found snacking in the kitchen. When you see one, there are thousands hiding in the shadows. Time for regulators, customers, and insurers to wake up and read the invoices.
There was an idea floated that drug companies that are caught price gauging should face an early expiration of their patent protections. That sounds like a good idea. Turn the generics loose on these cheaters and these drug companies might think twice about preditory pricing.
The response from Mylan has been slow, arrogant, and tone deaf.
Insurers are auditing the costs?
You could argue that Mylan is simply exploiting a defect in the system. When they realized they could raise prices carte blanche without opposition, they somewhat rationally (and greedily) decided to continue the practice. They obviously went overboard and lost touch with reality. The fact they could go so far for years without any red flags being raised is evidence that something is seriously wrong with how our healthcare is financed. The fidiciary responsibility for fair health care prices is lacking a responsible owner. Patients only look at out of pocket expenses, while insurers are drowning in paperwork and out-of-date computer systems. Round and round we go. Up go premiums, and somewhere a Martin Shkreli-clone is laughing all the way to the bank.
Last I checked, the calendar shows that we are in the 21st century. We have machines and algorithms that can detect the slightest of anomalies. Yet a 500% increase in one of the most popular drugs in the US goes unnoticed. Technology is available to solve this problem and make sure that price gouging and wasteful medical bills go the way of blood-letting with leeches. We have greatly advanced our medicine and science, but our accounting practices are still stuck in the dark-ages.
Wake up insurers. You are getting outflanked. Your treasures are under attack. We patients are tired of footing the bill in the form of skyrocketing premiums.
To be clear, drug companies do need to make profits
Bringing a drug to market is expensive and risky. It also requires a talented and well-funded R&D department. These drug companies need to make healthy profits in order to reinvest in new breakthrough medicine. Yet, a balance needs to be struck. For drugs with a small but dependent patient group, the cost of the medicine will need to be high enough to cover the cost of development, marketing and distribution. For drugs that have a large customer base, the economies of scale should help to keep the drugs pricing at a manageable level. The drug company should still be able to earn solid profits, which they can reinvest in enhancements and other R&D projects.
Epipen was Merck before it was Mylan
What value has Mylan added to the Epipen product? Merck handled the initial R&D effort and brought the drug to market. Could Mylan’s enhancements have added 5X value during its 9 year ownership of the product?
Mylan touts 1400 medicines that they manufacture and market. How many of these are overpriced? Someone should analyze the recent pricing history of their more popular drugs to see if Epipen is just the tip of the iceberg.
Digression — Most Epipens end up unused
Epipens are insurance policies for patients with severe allergies. I understand that the reason that Epipen’s expire rapidly is not so much the effectiveness of the dose, but more so the potential for the needle mechanism to fail. The Epipen does need to be stored properly and should not be exposed to heat or sunlight. It is better to be safe than sorry, so adhering to the expiration date is the best policy. Still, it is a shame that literally hundreds of millions of dollars of Epipens tossed out unused every year. If Mylan wants to add value to the Epipen, they can improve the reliablity of the needle mechanism, extend the expiration date on the dose, and provide a dose effectiveness indicator.
Epipen experienced a 5x price increase in 9 years under Mylan. During that same time, gold went up 1.6X, milk went up 1.8X and the price of gas has dropped.
