Browsing the blog archivesfor the day Thursday, August 25th, 2016.


Stuck With the Bill

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Health Care

Seems to me the Epipen scandal pretty much exemplifies most of what’s wrong with America. Consider:

The Epipen is epinephrine inside  a fancy delivery system.  According to Raw Story, the delivery system was developed by the military on the taxpayers’ dime.  If this is true, one wonders how the pharmaceutical corporation Mylan got an exclusive patent on the thing. If taxpayers developed it, why isn’t it in public domain?

For that matter, EpiPen has been on the market since 1977. Why hasn’t anyone else come up with a competitive product? The only alternative, as I understand it, is to get a vial of epinephrine and a syringe and inject it the old-fashioned way. That might not be practical for some people with extreme allergies that might strike at any time, especially for children.

Epipen’s list price soared to $608 per pack, from about $100 in 2007. Of that, the corporate vampire squid Mylan makes $274. The rest goes to wholesalers, insurance companies, retailers and “pharmacy benefit managers,” whoever they are. Sounds like a whole lot o’ gouging going on.

Note that Mylan has made no significant changes to the Epipen for years. They raised prices, mostly over the past three years, because they expected a generic competitor to come on the market next year, but in fact the FDA did not approve the competitor. So Mylan still has a monopoly.

And there’s this: “For years, Mylan Pharmaceuticals has been selling the devices to schools at a discounted price, giving them a break from rising costs. But the program also prohibited schools from buying competitors’ devices — a provision that experts say may have violated antitrust law.”

And there’s this: “While Mylan was jacking up the price of the pens over the last nine years, making them nearly unaffordable for many patients, the company’s CEO, Heather Bresch, saw her total compensation package go from around $2.5 million when she was the company president to just shy of $19 million in 2015. ”

To add insult to injury, a couple of years ago Mylan re-incorporated in the Netherlands to save itself from paying U.S. taxes, but it’s still mostly located in the U.S.

In most civilized countries this sort of thing doesn’t happen because governments exercise price controls on medicines and medical technology. Companies can make a profit, but only so much profit.  People have been buying Epipen packs for about $100 in Canada, I understand.  Here, as you probably know, Medicare is prohibited by federal law from negotiating lower prices with pharmaceutical companies. Because it’s all about the profits.

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