Why Everyone Should Care About the EpiPen Drama
Mylan, the primary manufacturer of EpiPens, has been systematically hiking the price of the life-saving device, charging up to $600 for a dollar's worth of medicine. People with severe allergies depend on EpiPens to save their life when they're unknowingly exposed to allergens; it's essentially a requirement if an allergy is life-threatening. Mylan ostensibly gouged the price of a medicine because it knows that people quite literally can't live without it. Here's a breakdown of what's happening.
1. Mylan acquires the patent for the device and starts gouging the price.
In 2007, Mylan bought the patent for EpiPens when it acquired Merck KGaA. EpiPens have been made for decades and cost consumers roughly $100 (the price of an individual EpiPen is $57, but the pack comes with a pair) — before Mylan purchased the medication. While the product only delivers around $1 of epinephrine and is inexpensive to produce, Mylan slowly began raising its price. Bloomberg reported that Mylan raised the price by 400 percent between 2007 and 2016 and specifically 37 percent so far in 2016.
As it was raising the price, Mylan also launched a marketing scheme to raise awareness about childhood allergies. Not only was the company gouging the price for people who need it, but it was also trying to convince parents that they should also have the device just in case.
2. The New York Times publishes a story exposing the gradual price increase.
On Aug. 22, The Times revealed the extent to which Mylan has been hiking the EpiPen's price. One woman said that in a year her copay rose from $100 to $400. "I called the insurance company and asked why it was so high and was told that, actually, it's $700 total, and my co-pay is $400," she told The Times. Other people had similar stories and have started to consider risking not carrying the device since they expire after a year and users have to continuously replace them. The article brought attention to the increase, but people have noticed its rise for some time. A petition to stop the price gouge had amassed over 48,000 signatures when the article was published.
3. The outrage grows so vast, even Hillary Clinton weighs in.
In response to Mylan's price hike, Hillary Clinton released a statement urging the manufacturer to "immediately reduce the price of EpiPens." Clinton's statement also included her plan to require pharmaceutical companies to explain when they raise the price of a drug.
The detailed plan also includes a limit for out-of-pocket spending and an initiative to end drug companies' government subsidies and aims to allow Americans to import drugs from abroad. She also advanced a plan — which could stop incidents like the present problem — to promote more competition for pharmaceuticals and inhibit monopolies on drugs.
4. Mylan's CEO responds to the uproar.
On Aug. 25, the CEO of Mylan, Heather Bresch, appeared on CNBC to defend the company's decision to raise the price. Blaming America's complicated health insurance history, Bresch said, "We're continuing to try to do our part on educating on that supply chain, and we all know it's complex and our health care and insurance is complicated."
Disturbingly, Mylan's CEO compensation rose 671 percent during the same period as the EpiPen's price hike. In 2007, Mylan's CEO made $2.3 million, and by 2015 Bresch was making $18.9 million.
5. After the justified backlash, Mylan will offer a discount to people buying EpiPens without insurance.
As more and more people have learned about Mylan's financial hostage of an essential device, the company has tried to backtrack. As of Aug. 25, Mylan says it will offer discounts of up to $300 to people who are paying out of pocket. However, the company won't actually change the price of the EpiPen.
6. This isn't the first time a drug company has increased the price of a life-saving drug.
Just last year, Martin Shkreli, a CEO of a pharmaceutical company, made headlines for raising the price of a drug that treats AIDS and cancer patients' immune systems by 5,000 percent. Shkreli bought the patent, like Mylan, and increased the price from $13.50 to $750 a pill; there was no alternative on the market. America is one of the only developed countries where drug companies are permitted to raise the price of drug without reason and transparently for a capital gain. Only a change in current regulation could prevent this from happening again — and again.