The outrageous increase in the cost of the EpiPen, the life-saving injection device for victims of sudden shock due to severe reactions to peanuts, bee stings and other allergies, is a shock tself. The price has shot up from about $100 in 2009 for a two-pen set to $600 or more now.
There is no discernible reason for this astounding increase. It is no recent discovery, given that the EpiPen has been around since 1977. Nor is it particularly expensive to manufacture; the drug itself costs less than $2, and the injectors are fairly simple devices available for less than $50.
But what EpiPen has going for it is exclusivity. When pharmaceutical company Mylan bought the manufacturer nine years ago, the EpiPen went for less than $60 apiece. The price has been increasing steadily ever since then.
EpiPen accounted for 87 percent of all prescriptions of epinephrine — the active ingredient — that pharmacies filled last year. Then its main competitor — a product known as Auvi-Q — was recalled by its maker. Now EpiPen has the field all to itself, just as schools reopen for the academic year and parents scramble to ensure that their kids who need the device have it.
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The company’s monopoly in no way justifies the skyrocketing increase. If anything, having exclusive access to a life-saving drug should impose a special responsibility to ensure that it is available at a reasonable price to all those who need it.
The company says it has given away about 700,000 EpiPens to schools since 2013 and provides coupons to cover the cost of co-payments for most consumers with commercial insurance. It also blames the problems caused by high-deductible plans that put its product out of reach for many families. But none of that explains the stiff increase in costs to the consumer.
The price increase has run parallel to the fattening of executive compensation at Mylan. Heather Bresch — the daughter of Democratic Sen. Joe Manchin of West Virginia — was president in 2007 and has since become chief executive. She went from making $2.4 million nine years ago to $18.9 million last year. Other company executives enjoyed similarly gargantuan hikes in compensation.
The EpiPen controversy is only the latest example of price-gouging by pharmaceutical providers. A House of Representatives report found in 2014 that 10 generic drugs — medicines used to treat asthma, high blood pressure, high cholesterol and other ailments — experienced price increases just a year prior, ranging from a 420 percent hike to more than 8,000 percent.
All of this drives up the cost of healthcare. It makes health insurance more expensive and it inflates the cost of getting sick. It makes any prolonged hospital stay the financial equivalent of a near-death experience.
The initial public response to the latest scandal is an online petition urging government action. The first step should be a hearing by Congress, which some members of the Senate Judiciary Committee have called for. Lawmakers haven’t hesitated to haul corporate leaders — think tobacco industry — up to the Hill to explain themselves. Ms. Bresch’s connection to one of their colleagues should pose no awkward impediment now.
Finally, the government should ensure that no lives are lost because of predatory pricing in the pharmaceutical industry — even if it means shortening or eliminating the period of time that gives a manufacturer exclusive rights to any life-saving drug.