Mylan, the company that produces the life-saving EpiPen, settled an investigation by the U.S. Justice Department Oct. 7. The company agreed to rebate $465 million in Medicare and Medicaid fees after increasing the pen’s price from $100 to $600 for a pack of two. The investigation alleged that EpiPen was misbranded as a generic drug when it should have been designated a brand name, which would have entailed much higher rebates to Medicare and Medicaid.
The company noted in an Oct. 7 press release that the settlement was not an admission of guilt and offered no apology for conduct that is commonly viewed as price gouging. As a result of the increase, Mylan has made more than $1.3 billion on the EpiPen since 2011.
Although Mylan announced on Aug. 29 it will produce a generic version at half the price, there are currently no competitors making an auto-injector of epinephrine, which is used in cases of emergency. Doctors recommend all people with severe allergies carry the pen. Unfortunately, the price jump placed the drug out of reach to people with inadequate or no insurance coverage. The extent of injuries suffered by those who could no longer afford the pen is unknown.
As an alternative, people have traveled to Canada to purchase the drug, but that’s only affordable for people who live close to the border; furthermore, the drug can be confiscated if the buyer does not have a doctor’s prescription. EpiPens bought online from a foreign source also run the risk of confiscation, and there’s no way to verify the product’s integrity and safety. In America, there are similar drugs like Adrenaclick, but they are difficult to obtain as a result of being manufactured in limited supply because they aren’t as widely used as EpiPens.
The settlement will restore funds to the government but is inadequate because it lacks an acknowledgment of the company’s obvious wrongdoing. Exploiting a life-threatening, common condition is deplorable. The company is broadening its patient assistance program so that families of four with an income below $100,000 will pay reduced rates and has distributed discount coupons but compensation is still due to those affected by Mylan’s unconscionable pricing.
This situation is part of a long pattern of drug companies and medical service providers taking advantage of the current healthcare system and overcharging patients. Martin Shkreli, a pharmaceutical executive, whose company Turing Pharmaceuticals acquired Daraprim, a drug used to treat HIV symptoms and certain complications in cancer patients, raised the price from $13.50 a pill to $750. He is being investigated by the U.S. Senate for these increases, which Mylan also underwent for its EpiPen disaster, but with insufficient consequences.
Under the Affordable Care Act, every American is required to have health insurance, but that insurance is not equipped to handle these price increases. It is unethical to deny people access to life-saving drugs because they cannot afford them, especially when there is no basis to make the drug unaffordable.
The system should not allow necessary medications to become inaccessible to certain people. One solution is reversing the market exclusivity clause in FDA approval that disallows low-cost versions of approved drugs for five to 12 years, or perhaps a more severe law change is called for.
Mylan should be more severely punished to serve as an example to other pharmaceutical companies who might do the same thing, and it should lower the price of the EpiPen down to an affordable range, so more Americans can buy it without traveling to Canada, or even worse—going without.