Tuesday, September 06, 2016


Epi-Pen and Competition

There has been a furor of late over the successful efforts of a company called Mylan to raise the price of one of its products, the Epi-Pen. Epi-Pens are used by people suffering severe allergic reactions. It is a simple machine that delivers a small amount of epinephrine, which allows people to survive those reactions.  Mylan did not invent or develop the Epi-Pen (they bought the patent), and the devices cost a small amount to produce (they contain less than $2 worth of epinephrine).  Over the past ten years, Mylan has raised the price 588 percent, to $600 for a set of two.

It has been possible for Mylan to do this because of a lack of competition. A fascinating article lays out how they worked to defeat the entry of a competing product by a company called Teva.  Here is the heart of it:

Mylan responded by filing a citizen’s petition with the FDA in January 2015, and urged the agency not to approve the Teva product unless it was the same as EpiPen. A key part of the Mylan argument was that anything other than an identical product may make it difficult for patients in an emergency situation to use a generic safely and effectively in keeping with instructions for EpiPen. 

Apparently, it is not unusual for companies to use "citizen complaints" in this way:
The analysis found, in fact, that brand-name drug makers filed 92 percent of citizen petitions between 2011 and 2015, although the US Food and Drug Administration denied more than 9 out of every 10 petitions. Last week, the FDA wrote Congress that most petitions do not raise valid scientific concerns and appear to have been filed to delay approval of competing medicines.

Urg! I really despise this tactic. It reminds me of the industry-funded "patient groups" that defend the over-prescription of opioids.
Capitalism works where there is competition. Government must make sure that competition is maintained, especially in relation to something as vital to some people's health as an Epi-pen.

Sarah Palin was the first person I ever heard use the term of art "crony capitalism" (back around the time she was defying conventional wisdom by asserting that a boost in oil production would lower gas prices at the pump). My point is not that -former half-term-Governor Palin turns out to be the great political sage of our time. Not hardly. Rather, it is worth noting that Sarah Palin populism has a lot in common with Bernie Sanders socialism. That is, we are all coming to grips with the nagging sense that something is just not right.

Having said that, and here is where Palin may be more astute than Sanders, our current system of a weak Congress and powerful executive and fourth branch bureaucracy in which statute is often over-shadowed by regulation and regulation often trumped by "guidance" (what is now being called by some regulatory dark matter) makes a c.21 reform much more complicated than the halcyon days of the early Progressive Era.
Congress is weak-- but it seems to be by choice (that choice being effectively to not participate in government). That may change with the next election, one way or the other.
Mark, I cannot disagree with you on either point.
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