Wednesday, August 24, 2016

Making money from medicine

Once more, SOYMB blog has to highlight a greedy pharmaceutical industry again.

Life-threatening food and insect allergies are on the rise. EpiPens are carried just in case someone with a severe allergic reaction to some everyday product, for example, peanuts or being stung by a bee.

The website Good Rx currently lists EpiPens as costing around $600 at multiple drug stores. In 2007, when Mylan Pharmaceuticals took over producing the drug from Merck, the cash price of the pens was about $50. And Bloomberg reports that the device only contains about $1 -- one dollar -- worth of epinephrine. Mylan who bought EpiPen in 2007 have raised the price of very common life-saving EpiPen by over 450 percent.

It's not really the epinephrine that makes EpiPens unique, it's the precision delivery system, the "Pen," that makes the product special. And that delivery system really hasn't changed since 1977 when the EpiPen hit the market. So why did the price jump up from $57 in 2007? Why are patients paying more than $600 for two pens less than a decade later?

Mylan bought EpiPen from Merck and then aggressively marketed the drug to concerned parents, while increasing prices annually. That strategy boosted the revenues from EpiPens by more than $1 billion, from $200 million in revenues in 2007, up to $1.2 billion in 2015. That strategy worked so well for Mylan that by 2015, EpiPen represented 40 percent of Mylan's operating profits. The stock price also more than tripled from $13.29 in 2007 to $47.59 in 2015. Mylan’s CEO, Heather Bresch,  total compensation has increased from $2.5 million to nearly $19 million -- a 671 percent increase. The company's lobbying efforts spiked from $270,000 to $1.2 million in 2008, resulting in changes in FDA guidelines that directly benefited the company's bottom line -- while patients still saw annual price increases.

Americans are paying some of the highest prices for prescription drugs in the entire world. In 2015, while patients in the United States paid about $415 for a package of two EpiPens even after insurance company discounts, patients in France only paid about $85 for the very same package.

EpiPens aren't sold in packages of two so that patients can buy a package and be safe for two allergic reactions. EpiPens are sold in packages of two because in the case of a severe allergic reaction, if emergency services can't arrive within 15 minutes of the first EpiPen shot, a second EpiPen shot needs to be administered, and if it isn't, that person could die. If one is used, you have to purchase more. And because EpiPens expire after one year, so again you have to purchase more. Americans are being forced to pay hundreds of dollars for a common life-saving product that has been on the market since 1977.

If we want to solve this issue, we need to take the profit-motive out of health care.

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