There are a lot of things about living in the United States that are completely different from what you’d experience living in any other country in the world. While many of those differences are great, there are some that no one likes.
While healthcare is one of the most contentious issues in American politics, the one thing everyone on every side of the debate agrees on is that the prices for treatment and medication are sometimes out of control.
It would be impossible to point to one single person, agency, or policy and say: “That’s why healthcare costs so much.” There are a large number of individual factors that come together in a complicated way, resulting in big price tags and bigger headaches for consumers.
But every now and then, something happens in healthcare where all of the smoke and dust clears and we’re able to get a good look at one of the culprits behind the exorbitant rates we are forced to pay for medication.
That happened just a short while ago when the price of a necessary and life-saving medical device skyrocketed out of nowhere. The device was the EpiPen, a delivery system for epinephrine, a medication that acts quickly on the whole body to shut down an extreme allergic response.
For people with extreme allergic reactions, having quick, easy access to a dose of epinephrine can literally be the difference between life and death. Fortunately, epinephrine is cheap. You can buy a vial just about anywhere in the world, including in the U.S., for less than a dollar.
Expensive Delivery System
But the delivery system that makes giving yourself that dosage quick and easy — especially if you’re going into anaphylactic shock — is far from cheap. Technically called an epinephrine autoinjector, EpiPens have been around since the 1970s. Since its introduction, the price of the device has climbed as steadily as other healthcare costs.
High and Higher
By 2007, the price for a two pack of EpiPens cost about $100. This is a pretty hefty price for a device that delivers less than a dollar’s worth of medication, especially considering that the epinephrine in the device expires after a year. But things would get far worse over the next few years.
Between 2007 and 2016, the price of an EpiPen two pack shot up from just over $100 to over $600. Unlike many expensive medical costs that leave people looking in vain for an explanation, the blame for this price hike didn’t take a detective to figure out.
Because the company Mylan effectively has a monopoly on the production of EpiPen-like devices in the United States, they can set whatever price they want. They simply decided that they could get away with charging more. And with customers given the option of paying the higher price or risking death from an allergic reaction, they had no choice but to dig deeper in their pockets.
Of course, there are those who would defend pharmaceutical companies, saying that the high costs of some of their products are necessary to offset the costs of production. After all, if a company spends a hundred million dollars to bring a product to market, they argue, that company has to make that money back somehow.
Not This Time
But that argument doesn’t hold much weight in this particular case, considering Mylan simply purchased the rights to the EpiPen and never had to pay for any research or development. And according to most industry analysis, the cost of manufacturing a two pack of EpiPens costs the company an estimated $10.
Mylan is also still able to sell their product at a profit for far less internationally. In Germany and France an EpiPen two pack costs about $200 and $100, respectively. When news about this price gouging became better known to the public, there was a massive backlash against the company. There were even calls from Congress for the CEO to appear before them and explain their actions.
Mylan CEO Heather Bresch’s pay soared from $2.5 million in 2007 to almost $19 million in 2015. The scandal was that Bresch’s pay increase aligned almost directly with the cost increase of the EpiPens. Such a direct correlation can in some situations be considered unethical.
Bresch wasn’t deaf to the cries of the public. She could tell that people “needed a solution and wanted a solution,” she said in an interview with CNN. “And so before we did anything else, before I testified in Congress, before I did anything, we came to the market with a generic and cut the price in half.”
The “authorized generic” EpiPen, which was basically identical to the name-brand version, was announced and sold in December of 2016 for about $300. Afterward, Bresch patted herself and her company on the back for taking “unprecedented” and “decisive action” to help American families.
When Bresch was interviewed on a CNN podcast about the EpiPen scandal, she described it as a “defining moment” that left her a better person. “There is no question it strengthened me,” she said. “Things happen for a reason.”
She went on to paint herself as an unwilling participant in a broken system. “I wasn’t going to be apologetic for operating in the system that existed,” she said. “What I decided to do was put my effort and energy [toward] what needed to be fixed,” adding that she hoped to be a part of the solution to the general problem of skyrocketing pharmaceutical prices.
Be Happy For Me
But that doesn’t exactly mesh well with the price increases that happened under her direction or her own sky-high pay increase. That’s something she was seemingly insensitive to when she said that people should be happy that a woman in the drug industry was making as much money as the men.
It’s not the first time Mylan has made a pretty penny at the expense of the public. In August of 2017, they finalized a $465-million settlement with the Justice Department after they’d overcharged the government for EpiPens by misclassifying them as a generic rather than a branded product. That meant they would have to make far smaller rebates to state Medicaid programs.
She’s Got a Point
But for all Mylan’s bad actions and Bresch’s apparent insensitivity, there is some truth to what she had to say about the pharmaceutical industry. She and her company aren’t necessarily all that bad when it comes to the way that they operate.
Mylan is operating within a system that burdens everyday people with exorbitant healthcare costs and, with increasing insurance costs and growing deductibles, they are feeling more of the squeeze. It’s not the individuals like Heather Bresch or even single corporations like Mylan that need to change — it’s the entire system.