Martin Shkreli became one of the most notorious people in the United States for hiking the price of a rarely used life-saving drug by 4,000 percent in September 2015. And nearly a year later, dozens of reports are now coming out about how Mylan Pharmaceuticals hiked the price of the very common life-saving EpiPen by over 450 percent since Mylan bought EpiPen in 2007.
You’ve probably heard of EpiPens, and you probably know someone who needs to carry two around with them at all times, just in case they have a severe allergic reaction as a result of some everyday occurrence — for example, encountering a food product with peanuts or being stung by a bee.
ABC News reports that, “The website Good Rx … currently lists EpiPens as costing around $600 at multiple drug stores. In 2007, when Mylan Pharmaceuticals took over producing the drug from Merck, the cash price of the pens was about $50.” And Bloomberg reports that the device only contains about $1 — one dollar — worth of epinephrine.
But it’s not the epinephrine that makes EpiPens unique, it’s the precision delivery system, the “Pen,” that makes the product special. And that delivery system really hasn’t changed since 1977 when the EpiPen hit the market. So why has the price more than quadrupled since 2007? Why are patients who need this medicine currently paying $600 for two pens?
Because of the greed at Mylan Pharmaceuticals, plain and simple.
Cynthia Koons and Robert Langreth at Bloomberg wrote last year about “How Marketing Turned the EpiPen Into A Billion-Dollar Business.” The report details how Mylan bought EpiPen from Merck and then aggressively marketed the drug to concerned parents, while increasing prices annually.
That strategy boosted the revenues from EpiPens by more than $1 billion, from $200 million in revenues in 2007, up to $1.2 billion in 2015. That strategy worked so well for Mylan that by 2015, EpiPen represented 40 percent of Mylan’s operating profits, according to ABR/Healthco estimates.
A report from NBC News shows that during that same period Mylan CEO Heather Bresch’s total compensation increased from $2.5 million to nearly $19 million — a 671 percent increase!
The stock price also more than tripled from $13.29 in 2007 to $47.59 in 2015, and according to OpenSecrets, the company’s lobbying efforts spiked from $270,000 to $1.2 million in 2008, resulting in changes in FDA guidelines that directly benefited the company’s bottom line — while patients still saw annual price increases.
That strategy of aggressive marketing, price hikes and intense lobbying efforts also feeds the problem that Sen. Bernie Sanders spotlighted on the campaign trail last year: Americans pay the highest prices for prescription drugs in the entire world because the pharmaceutical companies take Americans for suckers.
So in 2015, while patients in the United States paid about $415 for a package of two EpiPens even after insurance company discounts, patients in France only paid about $85 for the very same package.
And just to be clear, EpiPens aren’t sold in packages of two so that patients can buy a package and be safe for two allergic reactions. EpiPens are sold in packages of two because in the case of a severe allergic reaction, if emergency services can’t arrive within 15 minutes of the first EpiPen shot, a second EpiPen shot needs to be administered, and if it isn’t, that person could die.
One parent wrote to Emily Willingham at Forbes and described how quickly that all starts adding up: “In our case, with 2 kids, we have to have 8 at all times: 2 for each child at school and 2 for each child at home, and that is if we don’t even use them! If we do have to use one, we have to purchase more.”
And because EpiPens expire after one year, they’ll have to purchase more anyway, and it could cost that parent nearly $5,000 every year to replace all eight EpiPens (in the unlikely scenario that Mylan doesn’t continue to cruelly hike the price).
The truth is, life-threatening food and insect allergies are on the rise, and we should be doing everything we can to make easy-to-administer epinephrine at least as available as defibrillators in public places, like restaurants, schools, universities, businesses, and so on.
It’s true that Mylan has made small efforts to make EpiPens more available; for instance the company has distributed nearly 700,000 free EpiPens to more than 65,000 schools around the country. And there is at least one cheaper generic option that costs “only” about $142 with a coupon, nearly twice the cost of two EpiPens in France.
Thanks to runaway corporate power, Americans are being forced to pay hundreds of dollars for a common life-saving product that has been on the market since 1977.
So, while Martin Shkreli grabbed media headlines and was widely reviled for his cruel 4,000 percent price hike last year, he’s by no means the only pharmaceutical executive who is relentlessly pursuing profits by taking sick Americans as suckers to be exploited and left for dead.
If we want to solve this issue, we need to rein in the pharmaceutical industries and take the profit-motive out of health care. That means we must join every other developed country in the world and expand universal Medicare coverage to every person in the country, and we need to allow Medicare to negotiate with prescription drug companies for reasonable prices that don’t force people to choose between food or pharmaceuticals.