Friday, August 26, 2016

Outrage Over EpiPen Exploitation

Outrage of EpiPen Exploitation

As the school year is beginning and students with allergies are adjusting to new environs and routines, it has come to light that the cost of EpiPens, a life saving medical device to treat anaphylaxis from food allergies and bee stings, has skyrocketed.

The price of an EpiPen has gone from $57 to over $400 a unit.  This dramatic price increase prompted one exasperated mother to concede that she is no longer putting away money for her kid's college fund but in order to save for EpiPens.

While Mylan, the manufacturer of EpiPens, has declined to indicate the reasons for the price spike, pharmaceutical manufacturers typically impose significant price in the waning years of a monopoly before generic alternatives are allowed on the market.  However, in this case, the FDA has unexpectedly rejected a generic anaphalaxis alternative from Teva, requiring "more data".  And dosing problems prompted Sanofi pharmaceuticals to pull Auvi-Q (a non-generic treatment) from the market.  So EpiPens has a virtual monopoly on anaphylactic remedies as Mylan was seeking to suck every last cent of profit from EpiPens.

It may raise eyebrows that as Mylan acquired its virtual monopoly for EpiPens, Mylan's CEO Heather Bresch saw a 671% increase in  salary and compensation, going from $2.4 Million to a reported $18.9 Million. And it is an inconvenient truth that Ms. Bresch is the daughter of Senator Joe Manchin III (D-WV) who has donated $60,750 from 2011 to 2015. Between the generous financial support and filial ties,  it raises the specter of crony capitalism and possible nepotism. 

While Senator Manchin does not directly sit on heath committees and has voiced public concern over the incredible cost increases for EpiPens, his daughter might not be grilled harshly by his colleagues.  And it is unclear how the FDA decided that they needed more data for the generic.  With accusations of State Department concierge service associated with the Clinton Foundation and the politicization of Executive Branch Agencies (EPA, Energy, Agriculture etc..) and supposedly Independent Agencies (e.g. FCC on net neutrality), family ties may expedite an advantageous environment.  Or perhaps it's just another isolated incident of corporate serendipity .

The public was outraged by the EpiPen exploitation.  Sarah Jessica Parker, whose son suffers from anaphylactic shock, agreed to be the celebrity spokeman for EpiPens.  When this controversy arose, Sarah Jessica Parker went on social media to end her association with Mylan, thus walking away from a lucrative endorsement contract.

Mylan sought to mitigate the public relations mess about EpiPens by announcing that a family of four making $97,000 would pay nothing out of pocket for the prescription. That sounds nice but the inflated costs are just passed along to insurers and employers. With Obamacare on the precipice of a financial death spiral in 2017 and insurers pulling out of health exchange markets, this solution is a mere chimera. 

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