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The Most Egregious Part of the Epi-Pen Price Hike (hint: it's not the CEO's pay)

The Epi-Pen price hike will effect families whose members include the allergic [Image available as a bumper sticker at]

Last week news broke that Mylan, the company that produces the portable, life-saving epinephrine injection kit known as an Epi-Pen, has raised the price by 400% in recent months. This puts the out-of-pocket cost into the highest category of co-pays for those with prescription drug coverage, and for those without it, they are now going to have to pay up to (*more on this later) $800 per 2-pack. Epi-Pens are used for individuals who have severe allergies resulting in anaphylactic shock, most commonly to certain foods, bee stings, or medications. Anaphylactic shock is no trivial matter: the blood vessels contract, the airway constricts, and if not reversed the end result can be death by suffocation within minutes. Fortunately, an injection of the naturally occurring hormone epinephrine readily reverses this state and the allergy sufferer recovers. As the time course of anaphylactic shock is so rapid, it is critical the folks with these severe allergies carry epinephrine injections -one to use, and a second as a backup in case the first injection malfunctions- with them at all times because often there is no time for an emergency responder to arrive with a life-saving dose of medication. Note that this literally means at all times – a child must have 2 doses at home, 2 doses at school, and often 2 doses are kept in a parent’s bag. At a potential cost of $800 per 2-pack, that’s $2,400… and each one has to be replaced once per year whether or not it has been used. Wow.

Hopefully the above description illustrates why this particular drug price increase has gained so much attention. It isn’t an optional medication. One can’t skip doses or cut their pills in half in order to save money. If you need one, having an Epi-Pen is literally a matter of life and death. Mylan responded to criticisms with several seemingly rational justifications for the increase; however, they all ring hollow to me, and that was before this morning’s news revealed that their CEO just received an $18 million salary increase (and yes, that says increase, not simply salary). Mylan claimed that improvements to the auto-injector technology was the reason, though they acquired the rights from another company nearly 10 years ago. They point to a program that allows a reduced rate for the pair of Epi-Pens kept at school, or that uninsured/low-income families can apply to Mylan for free doses, without mention of families with high-deductible/maximum out-of-pocket plans. Nearly $2,500 is a large annual expense, but it is almost always well below these insurance limits, especially for families who may not have employer-negotiated health coverage. They also point to the generic autoinjector Adrenaclick as an affordable alternative option, but neglect to mention that the two devices calibrate differently and have disparate operating procedures. In other words, a person trained to use an Epi-Pen may not correctly use an Adrenaclick. Most parents wouldn’t want to risk changing, and I do not blame them one bit.

So what was the reason? The response that says it all is the most egregious part of this story, even more than the CEO pay against the backdrop of this price increase: the perceived value of the product and the lack of a viable competitor justified the increase. In other words, people will pay whatever they have to rather than lose their life or watch their child die. Long story short, Mylan raised the price because they could, and they are in no way alone in their choice to do so. This is not the fairness of the free market, or “the way capitalism works”. This is greed; pure, unadulterated greed. If you required convincing, read this industry insider’s opinion of the matter. If Pharma Bro is questioning your moral compass, you have done something very, very wrong.

[Getty Images]

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