Another drug-pricing ripoff in the US

THE rapid increase in the price of the EpiPen, a device used to give an injection that can save people from deadly allergic reactions, has shocked consumers and lawmakers. Yet it is just one more outrageous instance of pharmaceutical companies raising prices for lifesaving medicines with no justification other than the desire to increase profits – and doing so knowing that government can do little about it.

EpiPens have been used since 1977 to deliver epinephrine to people suffering anaphylaxis, an allergic reaction that causes the body to go into shock and air passages to narrow. If not treated quickly, the condition can lead to death. People allergic to peanuts, bee stings and other things often carry these auto-injections with them at all times.

Mylan, which sells the EpiPen, has raised the wholesale price from less than $100 for a two-pack in 2007 when it acquired the product from Merck KGaA, to about $600 in May. Those price increases and more marketing helped boost sales to about $1 billion, from $200 million, Bloomberg News reported last year.

Some consumers say they can no longer afford EpiPens and are relying on old EpiPens, which may not be as effective because the devices expire after a year. Emergency medical services in some cities are now using syringes and epinephrine vials, which cost much less but can be harder to use. A competing product, Adrenaclick, also costs less but some insurers do not cover it and many doctors do not prescribe it because it is not as well known.

Several members of the US Congress are calling on Mylan to explain its price increases. Experts say the device has not changed much, which would rule out the need to recoup research and development costs, a common industry explanation for high prices.

Senator Amy Klobuchar has asked the Federal Trade Commission to investigate whether Mylan has used illegal tactics to dominate this market by, for example, getting insurers not to cover and pharmacies not to stock competing products. She has also asked for Senate hearings.

High-level scrutiny from Klobuchar and others could conceivably shame Mylan into lowering prices. But if Congress were concerned about escalating drug prices, it would undertake a broader look at the industry and legislative remedies. Mylan is hardly alone. Prescription drug prices jumped 38 per cent in the past 10 years, compared to an 18 per cent increase in general inflation.

One reason for those increases is that Congress doesn’t let Medicare negotiate prescription-drug prices. Many medicines cost significantly less in other developed countries, like Canada and Britain, which do negotiate with drugmakers. Pharmaceutical companies have also squelched competition by, in effect, paying one another to delay the introduction of generic drugs. The US Supreme Court ruled in 2013 that regulators could challenge such agreements on antitrust grounds, but did not declare those deals illegal. Congress should pass legislation that would make pay-for-delay agreements illegal.

But many in Congress are ideologically opposed to giving the government more control or are unwilling to vote against the interests of the drug industry, which donates generously to political campaigns. Until that changes, the cost of medicines will continue to escalate.