PRESCRIPTION DRUG COSTS
Congress should adopt reforms
A congressional hearing on Wednesday about the outlandish price increases of the EpiPen followed a pattern that has become all too familiar in recent years. A drug price soars for no reason; lawmakers call a hearing to scold a pharmaceutical executive; the executive pleads innocence and provides as little information as possible. The drama plays out with no effect on the price.
So it seemed to go with the hearing on the EpiPen, which is used by people suffering a severe allergic reaction to inject epinephrine, a lifesaving drug. Mylan, the maker of the device, raised the price to more than $600 for a pack of two in May, up from about $100 in 2007, when the company acquired the product from Merck KGaA. The increase caused a public uproar this summer. Members of Congress called for hearings and attorneys general in New York state and West Virginia have said they were investigating Mylan for antitrust violations.
Mylan says it will soon offer a generic version of the EpiPen that will sell for $300 for a two-pack, but those devices will still be a lot more expensive than what EpiPens used to cost. The company is providing discounts and free devices to more people, but Heather Bresch, its chief executive, on Wednesday defended the pricing tactic and suggested that health insurers should just pick up the cost. Meanwhile, Mylan has been lobbying to have the EpiPen included on a federal list of preventive medical services, which would require employers and insurers to pay the cost, without a patient share.
Mylan, which controls nearly 90 percent of the market for epinephrine injectors, can raise the price so readily because it faces little competition. The Food and Drug Administration in February rejected an application for a generic epinephrine injector made by Teva Pharmaceuticals, citing “major deficiencies.”
Teva recently said it hoped to introduce its generic injector by 2018 after addressing the FDA’s concerns. Mylan has further restricted competition by requiring schools that buy EpiPens at a discount to sign contracts that forbid them from buying injectors made by other companies.
Mylan’s price gouging is only the latest example of a disturbing trend. The price of brand-name prescription drugs jumped 164 percent between 2008 and 2015, according to ExpressScripts. In 2013, Americans spent on average $858 per person on prescription drugs, compared with an average of $400 in 19 other industrialized nations, according to a study published in the Journal of the American Medical Association last month.
Most developed countries negotiate prices with drugmakers, but Congress has prohibited Medicare from doing that. Allowing Medicare to negotiate prices would set a benchmark for the entire health system, since it covers more than 55 million Americans. Lawmakers have also granted pharmaceutical companies long patent monopolies on their products, making it hard for generic drug companies to offer cheaper versions of brand-name medicines.
Even after patents have expired, generic drug companies face numerous obstacles in bringing lower-priced medicines to market. To have a real impact on drug prices, Congress will need to do a lot more than browbeat pharmaceutical executives in the hopes of shaming them into reducing their prices.
FROM AN EDITORIAL IN THE NEW YORK TIMES