Pharma-robbers

EpiPen Maker's Latest Offer: Still Not Good Enough

By Robert Weissman for Common Dreams

Not good enough.

Mylan's public relations people should tell the company that drip, drip, drip responses to the EpiPen rip-off will only further enrage the public.

It's not enough to blame insurance companies, it's not enough to offer coupons, and it's not enough to offer an overpriced generic version of their own branded product.

The company must roll back its unjustified and outrageous price increases.

The weirdness of a generic drug company offering a generic version of its own branded but off-patent product is a signal that something is wrong.

Mylan knows its $600 per set of EpiPens is unsustainable, but aims to continue ripping off some segment of the marketplace - both consumers who do not trust or know about the generic and perhaps some insurers and payers constrained from buying a generic.

The announced $300 price for Mylan's generic also comes in too high; the profitable price in Canada is roughly $200 for two, and the price in France is roughly half that.

In short, today's announcement is just one more convoluted mechanism to avoid plain talk, admit their price gouging and just cut the price of Epipen.

Last week, Mylan unsuccessfully sought with a convoluted coupon and patient assistance program to appease a public furious over its unconscionable price spikes for EpiPens.

This week, Public Citizen and allies will deliver petitions signed by more than 500,000 Americans making clear that the only solution to unjustifiable price increases is a price rollback. And next week, Congress is back in session, when the heat will turn up still higher.

Mylan executives should be ashamed of themselves. But even if they are not, they should recognize that the issue is not going away until the company rolls back the EpiPen price.

The EpiPen case is not an outlier. It is reflective of out-of-control drug pricing. And the outrage over EpiPen prices is a harbinger of a rising public demand for far-reaching reform over drug prices, reform that restrains Big Pharma's monopoly pricing power.

The country has learned a great deal about EpiPens over the past two weeks. Here are highlights of what we know and where things are heading.

Outrageous price increases. Mylan is jacking up EpiPen prices at a spectacular rate, with the price sextupling since 2007. At $600 for two pens, with most families buying multiple sets and the product expiring every year, EpiPens are now a major financial burden for many families - and out of reach for some.

Price spikes cannot be justified; Mylan is raising prices "because it can." There is no legitimate rationale for Mylan's price increases. The company acquired rights to market the product in 2007, long after it was invented in connection with a Defense Department project.  Mylan did not incur any research and development costs, and its price increases cannot be justified by reference to R&D expenses.

Mylan CEO Heather Bresch has, remarkably, argued that price increases are justified because Mylan has spent so much money promoting EpiPens, including lobbying for laws requiring schools to stock EpiPens. 

It's rather bizarre for a company executive to argue that price increases are required because of promotional expenditures - especially when those promotional efforts have increased sales.

No, the reason Mylan has increased prices, as a Forbes columnist noted, is "because they could."

Mylan's growing greed. Mylan's EpiPen rip-off is characteristic of a company that is operating more like a brand-name manufacturer than a traditional generic firm. This transformation is reflected in the company's spiking prices for numerous drugs,  exorbitant CEO pay  and decision to shed its American identify as part of a corporate "inversion" to avoid paying its fair share of taxes.

Mylan's discounts: too little and too late. Last week, Mylan responded to mounting controversy with a false solution: providing deeper discount cards and an expanded patient assistance program. 

First, many consumers will not use the coupons or the programs. 

Second, many consumers with high deductibles or no insurance still will have to pay far too much for EpiPens -300 for a set of two - for every set they need. And Mylan's scheme does virtually nothing to alleviate the rip-off of the health care system, for which all Americans pay as consumers and taxpayers.

The solution for EpiPen's price spikes: lower the price. Mylan is not going to quell mounting anger until it actually lowers prices.  By way of marker, the price in Canada is roughly $100 per pen.  In France, it is less than $100 for a set of two.

The Great EpiPen Rip-Off is illustrative of broader problems: price spikes and monopolies. Prices for hundreds of drugs jumped more than 10 percent last year in the Medicare Part D program, according to a Politico analysis.   The entire business model of brand-name Big Pharma is built around monopolies and exclusivities. Increasingly, generics are exploiting pricing power that comes from limited and inadequate competition in the generic industry.

Price spike solution: tax windfall profits. Because price spikes are now pervasive and a built-in part of Big Pharma's and the generic industry's business models alike, we need a comprehensive solution. Congress should pass a tax on the windfall profits from unjustified price spikes.

Solution: a more competitive generic industry. What was once an incredibly robust industry has rapidly consolidated in recent years.  Generic prices are rising as a direct result.  

Where generics have no competition at all, measures such as permitting the U.S. Food and Drug Administration (FDA) to authorize marketing in the United States based on approvals overseas and speeding FDA approval of generic competitors - in both cases with extremely careful safeguards for quality and safety - may help. 

But major price reductions come not from one competitor for a product, but many. And that requires more competitors, period.

Solution: Rolling back monopolies and exclusivities. Big Pharma's scandalous pricing system is based entirely on monopolies. Drug companies benefit from patent monopolies and an array of government-created exclusivities. 

Indeed, Big Pharma is lobbying right now for expanded exclusivities - one measure adding just six-month exclusivities in certain cases would cost consumers and taxpayers $10 billion.  

Getting control of drug prices in the United States will require limiting exclusivities - including those demanded by Big Pharma in international trade deals  - and speeding generic competition when drug companies insist on unreasonable prices. 

Expedited generic competition is especially warranted in the many cases when U.S. government funding played an important role in developing a drug.

To add your name to the more than 500,000 calling on Mylan to reverse its disgraceful price spikes for EpiPens, go here.

Robert Weissman is the president of Public Citizen.