November 23, 2016 Vineet Tummala
Outrage Over Epipen Prices
In late August, the pharmaceutical company Mylan increased the price of a pair of Epipens to over $600. This price increase outraged many customers because the price of a pair of Epipens has steadily increased from under $100 in 2007 to over $600 this year. The Epipen serves as a lifesaving injection to people who suffer from severe allergies by injecting epinephrine into the body to reverse swelling and reopen airways. Most Epipen users need to buy boxes for their homes, car, and school or workplaces in order to always have the medical device nearby. The Epipen expires after 1 year, making the price increase an even more significant problem for families who need them.
One of the main reasons for the recent price increase was the recall of the Epipen’s two competitors. This enabled Mylan to have a monopoly over the 1 billion dollar severe-allergy industry despite the fact that the company did not actually invent the Epipen. Mylan bought the Epipen patent from Pfizer in 2007. Mylan claims that it spent over 1 billion dollars creating a new version of the Epipen and that the price increase will help recoup the money spent on upgrading the device. However, experts claim that the slight redesign of the Epipen cost less than a few dozen million dollars. One of the most outrageous aspects of the price increase is that the actual cost of producing 1 Epipen is estimated to cost only a few dollars. While the company complains about the cost of redesigning the Epipen, the CEO has no problem increasing her own salary. The salary of Heather Bresch, Mylan’s CEO, has increased by over 600% since 2007.
The controversy and public outrage over the price hikes have led to several changes. Mylan has agreed to help financially support low income families with the cost of the Epipen and has released a generic version of the Epipen for about $300 a pack. It also looks like Mylan’s monopoly will soon come to an end. Many companies are trying to create a cheaper generic version of the Epipen and one researcher in Nova Southeastern University in Florida is trying to create a pill to combat severe allergies. The pill would bypass Mylan’s patent rights, could last for 7 years without expiring, and would be much cheaper than the current Epipen. While it could take years before the Food and Drug Administration (FDA) approves this pill, at least Mylan knows that competition is on the way. Mylan made a grave mistake by trying to financially capitalize on their dependent customers and now their reputation and control of the market are at risk.
References
Image Source: https://www.statnews.com/wp-content/uploads/2016/07/AP_786516748633-2048x1152.jpg
http://well.blogs.nytimes.com/2016/08/22/epipen-price-rise-sparks-concern-for-allergy-sufferers/
http://www.nbcnews.com/business/consumer/mylan-says-it-upgraded-epipen-2009-so-experts-looked-inside-n652651
http://www.cnbc.com/2016/08/25/epipens-cost-just-several-dollars-to-make-customers-pay-more-than-600-dollars-for-them.html
http://www.nbcnews.com/business/consumer/mylan-execs-gave-themselves-raises-they-hiked-epipen-prices-n636591
http://www.cnbc.com/2016/11/19/epi-pill-may-replace-epipen-for-allergies.html