Guest Opinion: EpiPens and pharma bro Shkreli
In 2015, the so-called pharma bro Martin Shkreli vaulted to the top of America’s Most Despised list. How? By crowing about how his company hiked the price of a vital drug by more than 5,000 percent.
Cue the lightning bolts — congressional inquiries, media scrutiny and a pitchfork brigade of customers who demanded a rollback of the price hike.
Long story short: Shkreli lost his job and was busted on unrelated securities fraud charges.
You would think, having watched Shkreli’s tumble, that CEOs across America would steer clear of such controversy. After all, what company seeks to become an internet meme for greed? Or the first item that pops up in a Google search on price-gouging?
Enter drugmaker Mylan and its blockbuster EpiPen. Every parent with a child who has allergies knows about the pen. It’s a spring-loaded syringelike device that delivers a dose of epinephrine to quell breathing problems, swelling and other severe allergic reactions. Parents stash them everywhere — in kids’ backpacks, in desks, at home, in the car. Adults do the same because if you have an allergic reaction, seconds count. The pens come in packs of two and must be replaced every year.
Nine years ago, when Mylan acquired the EpiPen, a two-dose package cost around $94. Today, the average cost has spiked to more than $600. That price hits people without insurance or those with high deductibles hardest.
Democrats and Republicans in Congress demand Mylan cut the price. An internet petition to Congress, called “Stop the EpiPen Price Gouging,” has gathered more than 121,000 signatures, and the tally is rising fast.
On Wednesday, Democratic presidential candidate Hillary Clinton called the EpiPen price hike “outrageous.”
On Thursday, Mylan said it would boost programs that help patients pay for the EpiPen but would not reduce the price.
Stay tuned for Capitol Hill hearings and investigations.
Mylan, welcome to Shkreli-Land.
Among the defenders of Mylan’s pricing is ... you guessed it: Martin Shkreli.
“Mylan is the good guy,” Shkreli told CBS News. “They had one product where they finally started making a little bit of money and everyone is going crazy over it.”
We don’t begrudge Mylan its profits. And no, we can’t say if the price of the EpiPens is too high. That’s for the market to decide.
What we do know is that when Shkreli spiked the price of his company’s drug, Daraprim, competitors emerged to offer similar drugs at lower prices. The same could happen here. That’s the way the market works. It may already be working:
In Illinois, emergency medical workers will soon be allowed to use epinephrine injected via syringe rather than EpiPen. The new law takes effect Jan. 1. If the price of EpiPen continues to rise, we’d expect to see more of that, and more pressure on the U.S. Food and Drug Administration to clear competitors’ devices for sale.
Meanwhile, Mylan is free to charge whatever the market will bear. It makes an excellent product that can save lives. That’s extremely valuable.
But so is a company’s reputation. And its customers’ good will. Because the market rewards and punishes according to those attributes too.
Bottom line: Companies that care what the world and their customers think of them don’t relish being mentioned in the same breath as Martin Shkreli.