The outrage part of the EpiPen controversy is easy. It is simple to generate criticism of drug company Mylan, which has increased the price of a life-saving EpiPen two-pack from $100 to about $600 over the past nine years. But actually solving the problem, actually weighing the benefits of the free market against the public good provided by government intervention, is more complex.
Mylan is the sole maker of EpiPen, which is a delivery mechanism for epinephrine, and the company has patent protection on the product until 2025. Because epinephrine is essential for those who have severe allergic reactions to spider bites or bee stings or a variety of foods, for many families an EpiPen has become indispensable. Seconds can mean the difference between life and death when a severe reaction occurs, meaning that sufferers keep the product in backpacks, desks, cars, medicine cabinets, and anyplace else that ensures a dose is close at hand. In addition, it is recommended that an EpiPen be replaced each year.
Mylan has taken advantage of this, raising the price of the product by about 15 percent every three months in recent years — although experts say each EpiPen contains $1 worth of epinephrine. Meanwhile, the salary of CEO Heather Bresch has gone from $2.5 million in 2007, the year Mylan acquired the EpiPen rights, to $18.9 million last year, and the company’s stock price has tripled. It is easy to see why “Big Pharma” has become a pejorative in the mind of the public.
The reason for the price increase on the EpiPen? Because the company could get away with it. Mylan has a monopoly on the product, many state legislatures have seen fit to require schools to have EpiPens on hand, and there has been no public backlash against the price hikes — until the past couple weeks.