Mylan, drug prices, and a safety valve drug companies do not like

By Roger Bate

Mylan, the generic pharma company, was probably unwise to recently raise the price of its EpiPen anti-allergy emergency device. And the announcement today that it will introduce a cheaper version will not assuage its opponents. As we enter the home straight of an election where candidates will use any issue to make themselves look caring, it is no surprise that politicians, notably Hillary Clinton, have demanded inquiries into Mylan’s pricing. It is all the more galling because most of them have done nothing in the past to improve matters.

Most pharma innovations are done in US by US and foreign companies, funded by the high prices that can be charged here. While other countries should contribute more to R&D by allowing higher prices too, the system generally works, with insurance covering the cost for most patients.

EpiPen auto-injection epinephrine pens manufactured by Mylan NV pharmaceutical company. REUTERS/Jim Bourg.

But perhaps five percent of American adults (many millions) purchase medicines from online pharmacies. They are looking for convenience but especially cheaper prices, spending well over a billion dollars a year.

Safety is probably the most important issue involved in buying medicines online. Websites can sell fake medications while stealing consumers’ identity.

Over the past decade my research team has purchased drugs from online pharmacies, each time evaluating the processes, products, sites, and those who credential them.

Credentialed sites, whether in US or overseas, sold us good quality medicines. Some non-credentialed sites sold us fake medicines.

While the US Food and Drug Administration does not certify online pharmacies, it funds one of several third-party organizations that do. My research team found that credentialing of sites was the single most important determinant of whether the site was likely to always sell good quality medicines. Credentialed sites, whether in US or overseas, sold us good quality medicines. Some non-credentialed sites sold us fake medicines.

From a policy standpoint, these findings conflict with what the pharmaceutical and pharmacy industries would want (see here for a fuller analysis of the issue). Both maintain that buying from outside the US is dangerous and that one can only be safe buying FDA-approved US-sourced medicines. The result is obfuscation and misleading statements from both industries and their respective front organizations. This is harmful to both patients and the reputations of both businesses.

The FDA oversees drug quality and tells consumers it is illegal to personally import medicines into US. But on its websites, it acknowledges what nearly everyone who buys online knows to be true, that if you import less than 90 days supply of medicine for personal use the law is not enforced.

The FDA does not have jurisdiction of overseas sites and hence cannot actively support them, but it could at least discuss the evidence on credentialing that is in the peer review literature. To not do this is a detriment to its goal of helping US patients access good quality affordable medicine.


First published at AEIdeas on August 29, 2016.

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