EpiPen Maker is Blaming Obamacare, but is Noticing Prices a Bad Thing?

EpiPen Vs. the People

Mylan, the maker of the EpiPen, is blaming consumers noticing a recent price increase on ObamaCare, but the fact that consumers are price shopping might be a sign ObamaCare is working.

The logic here is that new high deductible plans are causing people to realize that “Big Phrama” has been price gouging the daylights out of America for years, and that is of course (at least in part) ObamaCare’s fault according to Mylan CEO Heather Bresch (and she isn’t fully wrong, noticing the cost of healthcare was one of the points of the law). We explain this strange story below.

The EpiPen Price Hike

EpiPen price hikes drew ire recently, as a disturbing trend of price gouging on lifesaving drugs has been all too common and EpiPen is a perfect example of the trend.

The company has increased the price of the EpiPen over 500% since 2007, from a list price of $93.88 to $608.81 (for a two pack) as of August 2016 (UPDATE: Mylan is responding to the criticism by offering a generic and a savings card, which are in the works, but not specifically confirmed).

To be clear, An EpiPen is an Epinephrine injector that treats severe asthma attacks and allergic reactions (including anaphylaxis) in emergency situations. Meaning it is, among other things, what you inject a child with when they are having a severe allergic reaction or an asthma attack in order to save their life.

The History of the EpiPen

The EpiPen autoinjector is derived from the Mark I NAAK ComboPen, which was developed for the U.S. military for treating exposure to nerve agents in the course of chemical warfare. So its not like Mylan invented it.

The drug it injects, Epinephrine, has been around since 1901 and the wholesale cost of epinephrine in the developing world is between US$0.10 and US$0.95 a vial. So why $600 a pop? That is a question that is best answered by learning about Big Pharma and price gouging, this is simply business as usual.

See Epinephrine History and CostEpiPen inventor helped millions and died in obscurity, and Ten Huge Drug Rip-Offs — and Big Pharma’s Massive Price-Gouging Campaign.

Bernie Sanders explains drug price gouging. Once you understand the problem you’ll understand Mylan’s otherwise incomprehensible stance.

Why Did Mylan Raise the Price of the EpiPen?

The company, after drawing ire in the press, fired back at its critics by saying that a lack of transparency in healthcare and new higher deductible plans are to blame (specifically high deductible employer plans under the ACA), as people hadn’t noticed or cared about price hikes before (the insurer just paid it, and people just accepted it, and many could use an EpiPen Savings Card to offset whatever costs they did pay).

The above summary of Mylan CEO Heather Bresch’s comments, which you can see in more detail here, feel a little victim-shaming-y, but judgement calls aside deductibles are a sticking point of the ACA in some respects and one can’t blame the drug crisis on a single player or chalk it all up to bad intentions and special interests. So the criticism isn’t completely invalid. Still…

How is this ObamaCare’s Fault Again?

…Part of our healthcare crisis over the past 30 – 40 years has been due to a lack of “shopping around”. People have historically been disconnected with the cost of their healthcare, the ACA fixes that in an uncomfortable way (by fostering an environment in which high deductible plans are common), but the fact that these cost curbing measures are working is a bit of a silver lining.

Still, one can’t but help to think that the problem is less to do with “ObamaCare” and not more to do with a $500 price increase over the past 10 years (7 of which have been years in which the Affordable Care Act was enacted and Mylan enjoyed large profits).

TIP: See Mylan’s stock since 2010… like the insurers who are pointing fingers at the ACA, Mylan has enjoyed growth under the ACA despite its eagerness to blame the law.

Mylan’s chief executive, Heather Bresch, defended the price hikes last week, saying the company only received $274 of the total price for a twin-package while insurers, pharmacies and other parties divvy up the rest. – Mylan announces cheaper generic EpiPens amid price-gouging accusations

Heather Bresch Vs. Shkreli

In response to the backlash, Mylan announced that it would increase its savings card for people purchasing two-packs of EpiPens to $300 from $100. While that is better than nothing for the consumer, Bresch has maintained the position that she is not like Martin Shkreli, the pharma-bro who jacked up the cost of the life saving drug and wouldn’t admit it was wrong and kept trying to blame everyone but himself and the underlying drug problem.

Not admitting that price gouging is wrong aside, Bresch is correct that she is not like Shkreli… in that her father is Democratic United States senator Joe Manchin III (awkward). She runs one of the largest generic drug companies in the world. She also oversees the Generic Pharmaceutical Association — the generic industry’s lobbying group. She also didn’t spend her money on a Wu-Tang album, so that is different. Still, though, the kids with severe asthma and high deductibles…

For more reading see “EpiPen CEO: Blame the ‘broken’ system, not me“, “The maker of the EpiPen is blaming Obamacare for people noticing its price hike“, “Painted as EpiPen Villain, Mylan’s Chief Says She’s No Such Thing“.

Mylan CEO Faces Calls to Explain 400% EpiPen Increase.

OPINION: If I could offer an opinion, it would be to… you know… Stop jacking up the prices of life saving drugs and help the rest of address the underlying problem. I’m sure we can achieve profits without jeopardizing the sick and poor. Someone has to take the charge, and since Mylan just got caught out, and has ties to Washington in more way than one, it seems she should be the one to lead the charge. Don’t be like Shkreli is really what I am saying, don’t just say you aren’t, but actually show us you aren’t with your actions.

The FDA and the Pharmaceutical Industry. At some point, after enough Americans can’t afford their medication, people are you know, going to start asking questions. There really are only so many places to look when discussing the very real drug crisis. This lecture explains one of those places.

Author: Thomas DeMichele

Thomas DeMichele is the head writer and founder of ObamaCareFacts.com, FactsOnMedicare.com, and other websites. He has been in the health insurance and healthcare information field since 2012. ObamaCareFacts.com is a...

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