Broken System is Broken

Pharmaceutical company Mylan made big news last year when the Federal Government started investigating them for price gouging Medicaid for EpiPen.

“Since Mylan bought the rights to EpiPen in 2007, it has raised the price on 15 separate occasions, bringing the current list price to $608 for a two-pack up from about $50 a pen in 2007. That’s an increase of more than 500 percent, which easily beats inflation."
"But instead of classifying EpiPen as a “single source” drug, Mylan told regulators that it’s a “non-innovator multiple source,” or generic drug. Under that classification, Mylan is only required to offer a rebate of 13 percent and no inflation rebates."
"It’s unclear how much money Mylan has skipped out on paying in total to state and federal governments. But according to the state health department of Minnesota, as reported by CNBC, the misclassification cost that state $4.3 million this year alone.”

In response, Mylan announced they would be releasing a generic version of the drug, which would be more affordable.

“The new generic option, which the company said will be identical to EpiPens and available in a few weeks, is a two-pack with a list price of $300. That’s half of the current list price for a two pack, but still triple the 2007 cost of the devices."
"EpiPens—auto-injectors that deliver a dose of epinephrine to reverse deadly allergic reactions, namely anaphylaxis shock—cost just a few dollars to make and have not changed considerably since Mylan acquired them. Since the price hikes, Mylan has raked in more than $1 billion in revenue each year. The company's chief executive, Heather Bresch, saw her salary increase by more than 600 percent, topping $18 million last year. She’s one of the highest paid executives in the industry.”

Well that all sounds pretty disgusting. Hopefully someone else will join the fray and the competition can get these prices back in line. Fortunately, Kaléo announced they will be doing just that, revealing their competing product Auvi-Q.

“In an announcement Thursday, the company revealed that Auvi-Q will have a $4,500 list price for a two-pack and will be available February 14 for anyone who wants to buy one."
"Auvi-Qs were initially introduced in 2013 but were pulled from the market following dosage issues. The devices are slim and rectangular, easy to slip into pockets, and provide a voice-prompt system to guide through a life-saving epinephrine injection. At the time of their initial release, Auvi-Qs were listed at around $200 for a two-pack. By early 2015, when they were pulled, that price had floated up to $500, largely in step with Mylan’s pricing."
"The company also makes a device for injecting a cheap, older drug called naloxone, which reverses deadly opioid overdoses. As the country has suffered from an epidemic of opioid abuse and overdoses during the last two years, Kaléo raised the price of its device, called Evzio, from $575 to $3,750.”


Kaléo states that the product will be available for free for people who are uninsured and have a household income under $100,000. I’m all for sliding scales, but this seems totally over the top. Pretending that charging insurance companies these insane rates does anything but harm the consumer is ridiculous.

In almost all situations where products are developed, the cost of the product drops over time as the necessary costs of research and development have been covered. Why are drug companies allowed to live in a completely different reality?