Martin Shkreli, the smirking Pharma CEO, has been replaced for now as the national symbol for outrage over Big Pharma’s price gouging. Enter, stage right: Heather Bresch, a 47-year-old executive−who also happens to be the daughter of a prominent U.S. senator. Bresch has become the villainess of the moment for her firm’s jacking up the cost of a drug that millions of Americans rely on to protect them from life-threatening allergy reactions.
Mylan is her company, and it is at the heart of the public furor over the adrenaline-dispensing device known as the EpiPen. (Adrenaline and Epi or epinephrine are the same drug.) The company’s name may sound as if it were taken from a Disney movie. But it is unclear whether there will be a happy ending to its current tale.
Will a sustained public outcry lead to real change in its business practices? Will this incident curb the ever-escalating efforts by Big Pharma to extract sky-high prices for products, some of which have been around so long the industry is far beyond recouping any research-and-development costs?
As the New York Times has reported, the EpiPen has been around since 1977, and has gained wide acceptance for the speed, ease, convenience, and accuracy with which it delivers a small dose of epinephrine (a form of adrenaline) that can save lives of those hyper allergic to bee stings, foods (think peanuts, for example), or medications. Without the drug, which degrades and needs to be refreshed regularly, kids, especially, can go into anaphylactic shock, including a constriction of the airways, that can be fatal. Doctors urge the hyper allergic to carry two EpiPens, just in case.
But as the New York Times also has noted:
Mylan, the pharmaceutical company, acquired the decades-old product in 2007, when pharmacies paid less than $100 for a two-pen set, and has since been steadily raising the wholesale price. In 2009, a pharmacy paid $103.50 for a set. By July 2013 the price was up to $264.50, and it rose 75 percent to $461 by last May. This May the price spiked again to $608.61.
Mylan’s effort to wring every penny of profitability from EpiPens may have been prompted by the possibility of a lower-cost generic competitor, which federal regulators eventually turned away.
As tens of millions of students started back to school this month, many angry parents−especially because they’re wrestling with high deductible health insurance plans that force them to pay higher out of pocket costs−took to social media to vent their anger about Mylan’s astronomic charges for EpiPens, which contain less than a third of a milliliter of epinephrine, a drug that costs less than $1/milliliter.
The public anger since has boiled, with revelations about fat pay raises that Bresch and other Mylan execs have awarded themselves based on their boosting the billion-dollar profits from their firm’s major product, the EpiPen. They’ve also been ripped for exploiting laws to dodge U.S. taxes.
On Capitol Hill, lawmakers woke from the recess slumbers to flay Mylan, as they had Shrkeli, the PharmaBro who had sent skyrocketing the price of a drug needed by HIV-AIDS patients to combat infections. But even as they aggressively questioned Mylan’s pricing tactics and sought to put Bresch on the griddle, lawmakers discovered they were assailing the daughter of one of their own: Her dad is West Virginia Democratic Sen. Joe Manchin.
Bresch has shown more political acumen than the PharmaBro, with Mylan announcing that it would offer assistance to those in need so they could keep getting the prophylactic protection of the EpiPens. The company explicitly declined to roll back the product’s cost.
Instead, Mylan’s offer of co-pay coupons to assist customers has created its own new backlash. ProPublica earlier had explained why this tactic is ingenuous and can contribute to increasing drugs’ costs. Los Angeles Times business columnist Michael Hiltzik said the company’s assistance effort “drips with cynicism.”
So what’s next? Critics have hastened to note that at least a dozen drug makers have crazy high-priced products. A new study published in the peer-reviewed, prestigious Journal of the American Medical Association calls out the U.S. government, particularly the federal Food and Drug Administration, for abetting Big Pharma and its monopolies in sticking Americans with some of the priciest drugs and medication costs on the planet.
I’ve said before that we all may be reaching our screaming limits where we just won’t pay these ridiculous costs. We all need to ensure that our elected officials do more than posture and only occasionally raise a fuss. Lawmakers and regulators need to stop cozying up with Big Pharma and buying the unsupported argument that only wildly free enterprise will produce innovations that will benefit our lives. It also may be past time for litigation in the civil justice system, combined with robust shareholder activism, to restore economic common sense to seemingly now unrestrained Big Pharma pricing.