Extreme Need & Extreme Greed: Big Pharma & The EpiPen Price Gouging Debacle
The pharmaceutical industry has seemingly always faced intense scrutiny from the American public for being greedy, profit-hoarding, and heartless. The latest situation involving the headlines surrounding the massive increase of the life-saving EpiPen product from drug maker Mylan, displayed all of these elements in their most egregious form.
The mainstream media shed a large spotlight on the makers of the EpiPen, detailing the meteoric increase in the price of the product over the course of a short period of time. The name of the product, and the company involved, Mylan, became “water cooler” conversation throughout America, and for good reason because the actions taken by the company angered and frustrated so many consumers who rely upon that product as a potentially lifesaving treatment.
The price of the EpiPen has increased 550% over the past eight years, and Mylan CEO, Heather Bresch, has seen her annual compensation increase from a couple of million dollars to over 18 million dollars last year. The company blames the health insurance system and pharmacy benefit managers for the cost increases, it blames a health insurance system that is “broken” and that has shifted costs to the consumer in the form of out of pocket deductibles.
Some portions of that defense from Mylan may have some degrees of truth to it; the health care system is seriously flawed, the health insurance companies are also viewed to be intensely profit driven and greed driven, and the consumer has been forced to pay more in out of pocket deductibles in recent years.
However, the fact remains that a product that list priced for five dollars at one point and the list price is now around $600 for a pack of two EpiPen products is both outrageous and out of control. The public backlash aimed at Mylan was so severe that Congress got involved last week, which that alone is a sign that something is drastically wrong, because the top legislative body in the country very rarely interferes with a business especially a big pharmaceutical company.
It has been widely reported that the price increase around the EpiPen product is made even more burdensome for the consumer because there is no generic or alternative form of the drug available. Mylan announced on Monday that they will be manufacturing a generic alternative to the EpiPen product to alleviate some of the cost prohibitive strain that the brand name product has caused to the American consumer.
The generic version of the product will list price for around $300 and Mylan stated that they will continue to provide coupons, vouchers, and other programs to defray the cost of the branded product because the generic will take several weeks to gain the necessary regulatory approvals.
It is amazing how quickly Mylan reacted with the announcement of a generic formula after years of having no alternative form of the product. The combination of the massive public outcry and the involvement of Congress certainly triggered some action from the company. The debate over whether the generic is the best solution and the curious price point of $300 for that form of the drug will play out over the next several weeks. It should also be noted that the father of Mylan CEO, Ms. Bresch, is a member of Congress, which in itself is unbelievable.
The division of Mylan which produces the EpiPen has reported profits that have quadrupled over the past six years. The price hikes of the EpiPen in 2015 were connected to one of their main competitors exiting from the market. That corporate action demonstrates greed in its purest form.
The rampant price gouging and profiteering on a medication of this type leads the general public back to the opinion that big pharma companies are heartless. It is hard to make a case to the contrary when lifesaving medication is at the center of the scenario.
The EpiPen is a lifesaving product for those with allergies to food, bee stings, and a host of other potential life threatening triggers. The company drove their competitors out of the segment, and then increased the price 15 times since 2009 which, no matter what defense they use at Mylan, represents price gouging. The biggest issue with this latest episode which brought this entire issue to the forefront, and deservedly so, is the timing: with back to school for children of all ages increasing the demand for the product. That is outrageous and they should be investigated by Congress.
Mylan, and their embattled CEO have become the new “poster child” for rapacious corporate greed in this country. Their defense regarding the “broken” health care system with “complexities” in the branded drug formularies for the major health insurance carriers that they claim are responsible for this mess actually has some validity. The health care system is a mess because the major carriers found loopholes around the universal care provisions that require 80 to 90 cents of every dollar to be spent on health care programs; and not on bonuses for executives or other expenses.
The health insurance companies needed to find a way to get more dollars into the system overall since they are covering the care of more people and still want to be able to afford lavish meetings and big bonuses for the executives at the apex. They achieved this, by and large, through a series of changes and revisions to health care plan policies which force the cost burden back to the consumer through higher deductibles for separate categories of health care services.
In this way, a married couple or family may have anywhere between $2,000 to $6,000 in deductible expenses before the insurance pays out on a claim, and the plans have a maximum benefit amount that they will pay out per calendar year. The carrier can now divert the 10 to 20 cents of all of those dollars through this deductible funnel to engage in greed driven behavior themselves.
The bottom line is that the whole situation needs reform. The legislative bodies involved from both a federal and state level need to determine some concrete measures to curtail this type of price gouging in the marketplace from both sides involved: the pharmaceutical companies and the health insurance carriers because the average American is being squeezed in the middle, which is unfair.
The EpiPen is personal to me and to many friends and associates I know due to either a relative, child, or spouse who may need the product. My mother had severe allergies to a variety of substances and taught me when I was a child how to inject her with the EpiPen if she was unable to do so.
I used to think that the worst feeling in the world was having to be in that position where you need to use the pen to get a shot to save your life. However, after this past week, the worst feeling in the world is if you or someone you love needs the EpiPen product and you do not have it because you cannot afford it. That is unacceptable especially because it would be all due to the extreme greed of the corporations involved. That cannot happen anymore we need to change that trend through peaceful and diplomatic ways before it continues any further.