Editorial: Get to bottom of drug company overpricing

SHARE Editorial: Get to bottom of drug company overpricing

Congress is now investigating an increase of more than 500 percent in the price of EpiPen. | AP file photo

Outrage over a new $608 sticker price for a two-pack of life-saving EpiPens snowballed last week into an announcement that the U.S. Senate’s Permanent Subcommittee on Investigations had opened a “preliminary inquiry” into the matter.

Tough scrutiny of the decision by the pharmaceutical company Mylan to jack up EpiPens’ price by 550 percent since it bought rights to the product in 2007 is well-deserved.

But after lawmakers deconstruct Mylan’s mystifying EpiPen pricing strategy, Congress should find a cure for the larger problem of pharmaceutical price-gouging, especially for widespread life-saving drug products like EpiPen.

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Epi-Pens are the most popular form of injecting epinephrine to counteract deadly allergic reactions to foods or insect bites. Many allergy sufferers will not leave home without one, though they are forced to buy them in two-packs.

Epinephrine exists in a generic form, but EpiPen is unique for its effective auto-injection delivery system. Generic competitors thus far have not been able to replicate the dosing accuracy and ease of the EpiPen.

More than 3.6 million prescriptions for EpiPens were filled last year. They are now stocked in schools nationwide after Mylan pushed through legislation in 48 states to allow the devices in schools.

So Mylan’s decision last May to hike EpiPens’ price for the fifth time in seven years left its captive audience howling. As members of various U.S. Senate and House committees slapped Mylan CEO Heather Bresch with demands to answer written questions about the price spike, Mylan tried to calm the firestorm.

First, it announced a $300 “savings card” on insured customers’ costs and expansion of its financial assistance program. Less than a week later, the company unveiled plans to roll out a generic version of the EpiPen for $300 a two-pack for commercially-insured users.

That doesn’t much soften Mylan’s image as the latest poster child of Big Pharma price-gouging. It’s fair to suspect Mylan’s generic offering was merely an attempt to dominate that market before a competitor, Teva Pharmaceutical Industries, finally wins FDA approval to sell its own generic.


Follow @csteditorialsBig Pharma price hikes have raised the ire of Congress before, with little to show for it. In February, members of the House Committee on Oversight and Government berated Martin Shkreli for jacking up the price of the Daraprim drug used by AIDS patients from $13.50 to $750 a pill while he was CEO of Turing Pharmaceuticals. Appearing under subpoena, Shkreli took the Fifth, infuriating committee members.

But the tide may be turning.

The outrage over Mylan’s skyrocketing prices comes amid agreement by presidential nominees of both parties — Democrat Hillary Clinton and Republican Donald Trump — that consumers should be allowed to buy certain prescription drugs from other countries. That’s a remedy long overdue. Clinton would insist those foreign lands have safety standards as strong as those in the U.S. Both candidates also favor letting Medicare negotiate drug prices.

Just this month, citing the EpiPen controversy, Clinton released additions to her drug plan that call for the creation of a “dedicated group” of federal officials to determine the criteria for unjustified pharmaceutical price increases that could trigger fines.

Robert Weissman of Public Citizen, which has been vocal in slamming Mylan, favors a tax or fine on “windfall profits” to discourage excessive price hikes. One structure could be a 25 percent tax on increases of more than 10 percent, a 50 percent tax on hikes over 20 percent and a 100 percent tax on increases over 30 percent.

“That policy says we’ll tolerate some price increases, but it also says there’s a limit. We’re just not going to be suckers,” Weissman said.

Another obvious goal should be to speed the process for winning generic approval, without compromising safety, so that increased competition can keep prices down. Some also encourage a reduction in the monopoly time of patent-protected drugs to allow generics to enter the market sooner.

The number of pharmaceutical companies has been shrinking, resulting in less competition. Within the last two decades, 60 drug firms consolidated into just 10, increasing the political muscle of those “too big to nail” who survived, noted a February analysis in revenuesandprofits.com.

Republican and Democratic leaders of at least two subcommittees as well as a raft of Democratic U.S. Senators are putting heat on Mylan to explain its pricing strategy.

Republican or Democrat, nobody wants to be gouged on the price of a life-saving drug.

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