Well, if you needed any further proof that unchecked capitalism and health care are a toxic combo after Steven Brill’s exposé a few years back, add Mylan’s EpiPen price increase to the list of thousands of examples.
Mylan joins Turing Pharmaceuticals and a host of other big pharma villains to dramatically increase the price of life-saving drugs, with no justifiable cause other than that they have a monopoly and can get away with it. Since 2009, EpiPen prices have increased from under $100 per 2-pack to over $600 in the U.S. market (despite staying at below $100 elsewhere, such as Canada).
The EpiPen debacle is not quite as egregious as Turing’s 5000% price increase of an AIDS drug from less than $1 to $750 a pill overnight (while simultaneously staying at less than $1 in other markets), but it’s still similarly disgusting.
In both cases, the drugs have been around for a long time, have near monopolistic market power, underwent no noteworthy changes, and are necessary life saving drugs for their customers.
What did Mylan CEO, Heather Bresch, say to justify the price increase?
“I am running a business. I am a for-profit business. I am not hiding from that.”
“This system needs to be fixed. No one knows what anything costs.”
“Our health care system is in a crisis…This bubble is going to burst.”
“No one’s more frustrated than me.”
Ms. Bresch was so frustrated, in fact, that she went ahead and increased her compensation from $2.5 million to $19 million (over 700%) in the 7 years that she increased the price of EpiPen 600%. Poor gal.
This is where the mix of capitalism and health care become extremely toxic. You have:
- Necessary life-saving drugs with monopolistic powers (and built in protections on that power from all of their lobbying).
- CEO’s and executives whose already exorbitant pay will dramatically increase with price increases at the expense of patients who need the drugs to survive because they have no legitimate alternatives.
- The inability of Medicare to negotiate lower fair drug prices (they were literally barred from doing so by Congress).
- Smaller private insurers not having the clout to effectively negotiate lower drug prices.
- No price controls in the U.S. market, so U.S. patients subsidize profits, while the rest of the world pays just above cost.
And we wonder why our health insurance premiums have increased so much after the years?
While practices like this aren’t technically criminal (as was the case with the Volkswagen dieselgate case I previously ranted about), they belong somewhere along the spectrum of evil next to Amazon’s deplorable employer practices – a few very powerful and greedy people at the top gain at the vast expense of the powerless. Greed rules the day. There are some examples to the contrary (i.e. Chobani’s CEO), but they are exceedingly rare.
Here’s the thing – we’re not dealing with common consumer goods here with health care. We’re dealing with products and services that have life or death implications. Ms. Bresch wants to fix a broken system? Let’s help her do it. To fix this mess, there really needs to be a mix of the following, and we should start demanding it from our elected officials:
- Most developed countries regulate what drugmakers can charge, limiting them to certain profit margins if they want to sell their product in market. Why can’t we do the same? It’s insanity that a drug can profitably sell at $1 per pill in Canada, but cost us Americans $750 a pill.
- Medicare should be authorized by Congress to negotiate drug prices.
- A systematic removal of monopolistic competition controls that currently rule the market.
- An ACA exchange public insurance option, or better yet, single payer – to give public insurers more price negotiation clout that private insurers currently have, with the ability to negotiate lower drug prices.
Anything less, and we’ll soon all be beholden to our drug gods.