5 Myths About Mylan's EpiPen Scandal

September 9, 2016
By Alex Keown, BioSpace.com Breaking News Staff

PITTSBURGH – With the recent controversies over the high price of Mylan ’s EpiPen Auto-Injector, as well as other popular prescription drugs, The Nation set out to debunk five myths about prescription drug prices.

Before the myths are addressed, as a reminder, the EpiPen Auto-Injector, which delivers a precise dose of life-saving epinephrine for severe allergic reactions, has a price tag of about $600 for two injectors. For 2015, the EpiPen generated $1.2 billion, about 40 percent of all revenue for the company. When Mylan acquired the EpiPen in 2007, the cost of the drug was $57. As expected, there has been public outcry and calls from members of Congress for Mylan’s executives, particularly Heather Bresch, the chief executive, to explain the cost of the treatment. Bresch herself partially Bresch laid blame on the healthcare system on the healthcare system for the high cost of the EpiPen. She said the product must pass through “four or five hands” and companies before it reaches patients —with each company taking a bit of the money, causing the product to increase in price. There’s blame to go around, as the Nation points out in its own version of myth-busting.

1. Pricing outlier

Brent Saunders, chief executive officer of Allergan , called Mylan an outlier when it comes to the pricing of its EpiPen. But, The Nation points out there are many prescription medications that have seen dramatic price increases in recent history or simply carry a hefty price tag, including Gilead Sciences ’ hepatitis C drug Sovaldi, which sells for about $1,000 per pill. The Nation notes that companies like Valeant Pharmaceuticals snapped up drugs from other companies and then proceeded to spike the prices more than 500 percent. Most notoriously was Turing Pharmaceuticals, which acquired the 65-year-old toxoplasmosis treatment Daraprim and then increased the price overnight from $13.50 per tablet to $750 per tablet. With those examples, as well as others, The Nation says Mylan is not an outlier, but a “footnote in an industry-wide pricing swindle.”

2. Competition will lower prices

The Nation decries the lack of a price cap on prescription medications or the government’s ability to negotiate the price of prescriptions. Without those measures in place, The Nation reports drug prices have steadily increased, even when there is competition, as drug companies “often raise prices in tandem.”

3. High prices are necessary for innovation

The Nation points to a recent study in the “Journal of American Medical Association” that found a large number of companies only reinvest 10 to 20 percent of revenue into drug R&D. Most innovation is done at universities with government money, the study showed. The JAMA study found that drug prices actually reflect what the market will bear in the United States, as opposed to the “cost of innovation.”

4. Fault of the FDA

Pointing to theories running rampant on social media sights, The Nation said there are people suggesting the FDA is to blame since it rejected other products similar to the EpiPen, including one from Teva Pharmaceuticals earlier this year. The Nation points to the backlog of generic drugs before the regulatory agency and said that oftentimes large pharma companies file a “citizen petition” challenging generic drugs. Regulators are required to respond to those petitions, which helps create a backlog. Between 2011 and 2015 about 90 percent of the citizen petitions were filed by big pharma companies as a way to thwart rival generic products, the Nation reported.

5. Congressional action

Although Congress has held numerous hearings about prescription drug prices, there has been no meaningful legislation to curb the practice—partly due to the drug industry’s lobbying efforts, the Nation said. The Nation’s writers called upon President Obama or the next president (considering the political leanings of the publication it’s likely they prefer Hillary Clinton who has called for prescription price controls) to use the Bayh-Dole Act. The act allows the government to step in and demand reasonable pricing if the drug was developed using any public money. The government can also authorize the licensing of the drug to other companies, the Nation said.