Epipen price jump

[DoctorQuest]

http://www.nbcnews.com/business/economy/epipen-price-hike-has-parents-kids-allergies-scrambling-ahead-school-n633071

How do we depend on market forces when there is no market? Doesn't a monopoly effectively short circuit free market economics?

Discuss.....

Extra credit: Keep this out of Religion, Politics, and Flame Wars.  O0

[Sir Slash]

I suspect the price increase goes hand in hand with the legislation requiring it be stocked in Public Schools. If the Public Education System is paying for it, then why not jack-up your prices and get in on the big payoff?

[DoctorQuest]

Which, of course, brings up the question of "Just because you can, does that mean you should?"

Are corporations expected to exercise the same sort of moral and ethical restraints we expect from individual human beings? (This is an especially interesting question given SCOTUS' definition of corporations as "people" in relationship to free speech and political campaign contributions.)

Screwing your neighbor may be legal but is it really the right thing to do?

[OJsDad]

Screwing your neighbor may be legal but is it really the right thing to do?

Depends on the neighbor.  :P

It'll be interesting to see what reason's Mylan come up with for this. 

[OJsDad]

A couple of interesting things I've heard today on this.

1.  The prices on these have been going up for a few years now.  It is just starting to be seen by consumers because of the higher deductibles and people are now looking at their bills closer.

2.  The CEO of Mylan is Heather Bresch.  She's the daughter of Joe Manchin.  Joe Manchin the a Democratic US Senator from WV. 

[airboy]

The Epipen problem is what you get in a horrible regulatory state.  It is very time consuming (think many, many years) to get anything approved by the FDA and the process is amazingly expensive.  This is true even if the drug has been around forever and the technology is well known.

When you raise the entry cost barriers due to excessive regulation, you get de-facto monopolies set up by the government.  Monopoly pricing is easy to determine what the profit maximizing price is.  For Epipen's, nobody who does not have to have one will get one.  For those who need them, it can potentially save their life.  Thus highly inelastic demand and the need for multiple producers to keep prices low.  But the cost of entry for a new producer is so high due to the government, you get horrible pricing situations in the market.

And I'm saying this as a guy who has to have Epipens with them whenever they hunt.  If I step on a yellow jacket nest or get bitten by a rattlesnake or copperhead, I'm likely to die before I can get to the emergency room.

In sum, the problem is the US Government preventing competition due to a hyper-regulatory State.

[Con]

I was intrigued by an article I read on this as well and it turns out to not be a simple problem.  Here is the lead author on a new paper dealing witht his and policys quote

"I continue to be impressed by the complexity of the issue. It is not as easy as saying, 'Let's let Medicare negotiate for Part D drugs,' or any simple fix," said Dr. Aaron Kesselheim, an associate professor at Harvard Medical School and associate physician at Brigham and Women's Hospital, who was lead author of the paper.

Here is an abstract of his paper

http://www.ncbi.nlm.nih.gov/pubmed/27552619

[JudgeDredd]

My daughter has an Epipen - nut allergy - but as is the NHS in the UK, it's free.  O0

I think it gets replaced fairly regularly - like every 6 months? Which seems rather a waste - but they've got a "life span" on them 

[DoctorQuest]

The Epipen problem is what you get in a horrible regulatory state.  It is very time consuming (think many, many years) to get anything approved by the FDA and the process is amazingly expensive.  This is true even if the drug has been around forever and the technology is well known.

When you raise the entry cost barriers due to excessive regulation, you get de-facto monopolies set up by the government.  Monopoly pricing is easy to determine what the profit maximizing price is.  For Epipen's, nobody who does not have to have one will get one.  For those who need them, it can potentially save their life.  Thus highly inelastic demand and the need for multiple producers to keep prices low.  But the cost of entry for a new producer is so high due to the government, you get horrible pricing situations in the market.

And I'm saying this as a guy who has to have Epipens with them whenever they hunt.  If I step on a yellow jacket nest or get bitten by a rattlesnake or copperhead, I'm likely to die before I can get to the emergency room.

In sum, the problem is the US Government preventing competition due to a hyper-regulatory State.

What regulations would you remove to solve the problem?

[Con]

The Epipen problem is what you get in a horrible regulatory state.  It is very time consuming (think many, many years) to get anything approved by the FDA and the process is amazingly expensive.  This is true even if the drug has been around forever and the technology is well known.

When you raise the entry cost barriers due to excessive regulation, you get de-facto monopolies set up by the government.  Monopoly pricing is easy to determine what the profit maximizing price is.  For Epipen's, nobody who does not have to have one will get one.  For those who need them, it can potentially save their life.  Thus highly inelastic demand and the need for multiple producers to keep prices low.  But the cost of entry for a new producer is so high due to the government, you get horrible pricing situations in the market.

And I'm saying this as a guy who has to have Epipens with them whenever they hunt.  If I step on a yellow jacket nest or get bitten by a rattlesnake or copperhead, I'm likely to die before I can get to the emergency room.

In sum, the problem is the US Government preventing competition due to a hyper-regulatory State.

What regulations would you remove to solve the problem?

Please reasonable questions have no place here during a heated rant....shame on you  ;)

[Nefaro]

All Your Allergic Salvation Belong To Us.

[OJsDad]

What regulations would you remove to solve the problem?

Please reasonable questions have no place here during a heated rant....shame on you  ;)

http://thehill.com/blogs/pundits-blog/healthcare/292438-competition-is-the-cure-for-epipens-price-hike

What's preventing competition is not lack of demand, but regulatory costs imposed by the Food and Drug Administration.  One company estimates that it would cost them at least $1.5 million dollars to develop an EpiPen alternative and push it through clinical trials.

What can be done? Imposing a price cap on epinephrine autoinjectors would only discourage future competitors. Instead, we should make it cheaper and easier to bring alternatives to market.

Congress could offer the U S Food and Drug Administration (FDA) priority review vouchers for companies that launch competitors for single-source generics.  Given the high cost of clinical trials, conditional approvals for promising medicines could also allow companies to recoup some of their upfront costs and generate revenue, while collecting final data on safety and efficacy. Another option is to list more medicines for over-the-counter use, reducing the need for expensive prescriptions.

http://www.nytimes.com/2016/08/25/business/mylan-raised-epipens-price-before-the-expected-arrival-of-a-generic.html

What has further fueled the increases is that the expected generic, from Teva, was unexpectedly rejected by the Food and Drug Administration. And a nongeneric alternative, Sanofi's Auvi-Q, was pulled from the market last year because of dosing problems.

So rather than a last grasp for profits, Mylan has a near monopoly now, allowing it to continue the price increases for at least another year.

One question that remains is why EpiPen is protected by patents since it has been on the market since the 1980s. The active ingredient, epinephrine — a hormone made by the body and also known as adrenaline — was first isolated more than 100 years ago.

But EpiPen is protected by patents on the device, particularly the safety cap on the needle. The patents are held by Meridian Medical Technologies, which is now part of Pfizer. One such patent, which was asserted in litigation trying to block Teva's entry into the market, expires in 2025.

It is not clear why the F.D.A. did not approve Teva's product. Teva has said that the agency found "certain major deficiencies" and that its product will not reach the market until next year at the earliest.

[airboy]

The Epipen problem is what you get in a horrible regulatory state.  It is very time consuming (think many, many years) to get anything approved by the FDA and the process is amazingly expensive.  This is true even if the drug has been around forever and the technology is well known.

When you raise the entry cost barriers due to excessive regulation, you get de-facto monopolies set up by the government.  Monopoly pricing is easy to determine what the profit maximizing price is.  For Epipen's, nobody who does not have to have one will get one.  For those who need them, it can potentially save their life.  Thus highly inelastic demand and the need for multiple producers to keep prices low.  But the cost of entry for a new producer is so high due to the government, you get horrible pricing situations in the market.

And I'm saying this as a guy who has to have Epipens with them whenever they hunt.  If I step on a yellow jacket nest or get bitten by a rattlesnake or copperhead, I'm likely to die before I can get to the emergency room.

In sum, the problem is the US Government preventing competition due to a hyper-regulatory State.

What regulations would you remove to solve the problem?

The FDA should have a hyper-streamlined approval process for competitive entry after a patent has expired.  It would be simple enough to have a company post a $5 million bond to pay off manufacturing defects for the first 3 years.  The actual cost of such a bond would be very low.  Or, they could have approved drug manufacturers all of which can manufacture generics of any type by posting said bond.

Patents are PUBLIC DOCUMENTS!!  You can download and read them.  That is why we have patents!!  But the FDA puts a hyper expensive and onerous process to produce competitive products.

This is not complicated to solve - except by the idiot US government.

[Staggerwing]

I wouldn't be surprised to find that some of those onerous FDA regulations were actually created at the behest of big Pharma itself to keep competitors (especially smaller ones) from getting in on the fun.

[Wes]

All Your Allergic Salvation Belong To Us.

Somebody set up us the Epipen!

You have no chance to survive make your time...HA HA HA