Another Drug Price Hike, Another Hollow Debate: Mylan’s EpiPen 
[Posted on: Thursday, September 1, 2016]

News in the past week has been rife with another drug company gouging the price of a critical life-saving drug with no apparent reason. In a span of 6 years, Mylan raised the price of its EpiPen by 400%, and once again we had all those debates of how pharma companies profit from artificial monopolies and naked greed. This is not the first time and this will not be the last either. We heard it last year for daraprim whose price was hiked 5000%, its CEO was in trouble with the law and politicians; but an year later daraprim still costs the same $750 a pill. Its price was never cut and we have moved on to the next story. Mylan did not give any credible reason for raising the price of its drug but the reason is obvious. It was lucky to find a product that is used by millions of patients in the US, mostly children, with a 90% market monopoly thanks to lack of competition as FDA rejected practically all competition to EpiPen for one or the other reason. It is outrageous that a drug that cost pennies per dose to manufacture can be sold to needy patients for $600. On top of it, when accosted by the public outcry over the price of its drug, it exposed another mechanism used by companies to frustrate competition, the Authorized generics. Authorized generics are the same drug, packaged differently so it can directly compete with generic versions of itself without the hassle of a new approval or the inhibition of the generic exclusivity of its competition. By making an authorized generic, the brand company can cut the profits of the first generic version by more than 50% and discourage other generics by making them less profitable and hence unattractive business proposition for generic drug developers. With a total annual sale of about a billion dollars, there is a lot of this pie to share. But with its launch of an authorized generic, Mylan just extended the life of its market. It’s easy to blame a company for making profit but in free markets companies are answerable to only their investors. Mylan did not break any law, rather it did what every other company like would have done. The blame should be shared by other stakeholders. FDA is the primary culprit for not encouraging competition. It is hard to understand, how multiple generic version of EpiPen were rejected by the Agency for one or the other reason. It seems scientific logic took a back seat to bureaucratic process. It is FDA’s responsibility to assure market access of competitive products. It should reduce the barrier for approval of generic version of drugs. The original version of EpiPen was approved by FDA about 30 years ago. There are eight epinephrine autojectors approved in Europe other than EpiPen but only 2 are available in the US and it likely because those companies did not want to enter the US market. For the patients, this is same story that repeats unfortunately over and over. Yesterday, we were talking about Turin and daraprim, today it is Mylan and EpiPen, tomorrow will be a new similar story with similar ending. Till there are changes in the regulatory paradigm, these stories will repeat with new players. Time to change the debate, and ask different questions.