EpiPen Pushback Was Just a Start

One drug price hike briefly grabs headlines, yet focus should be on entire system

Have you looked at the cost of your most recent prescriptions? Mylan N.V., the maker of the EpiPen, isn’t the only company that has been steeply jacking up drug prices — it’s just the latest to get called out.

That’s what happens when costs start to come directly out of consumers’ pockets versus from the insurance companies.

But this is a critical health care issue we need to watch, no matter who pays.

Bresch and the [EpiPen] company successfully pushed legislation to encourage use in schools in 2012 and 2013.

Mylan increased the price of its EpiPen from about $57 a shot when it took over sales of the product in 2007 — to more than $600 for two auto-injectors this year.

Earlier in 2016, Martin Shkreli and executives from the company he once led, Turing Pharmaceuticals AG, as well as executives from Valeant Pharmaceuticals International Inc., were summoned to testify in front of Congress to explain the sudden price increase of a drug important to HIV patients.

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This isn’t some niche drug for HIV patients. It’s a mainstay drug used to treat life-threatening allergic reactions from bee stings, food allergies or other triggers. And by the way, it costs $20 in most countries in Western Europe.

This recent “controversy” fits a familiar pattern.

Earlier this week, Sen. Amy Klobuchar of Minnesota asked the Federal Trade Commission (FTC) to investigate whether the makers of EpiPen violated antitrust laws by steeply increasing the price of a product that treats people suffering from severe allergic reactions.

Members of Congress are in an unusual position this time. If lawmakers follow their usual script, Mylan’s CEO Heather Bresch will be called to Capitol Hill to “explain” her company’s justification for raising the price of a life-saving allergy shot. It might be a bit awkward — she’s the daughter of Democratic Sen. Joe Manchin of West Virginia.

Many suspect Bresch’s family ties may diminish the political theater that other drug companies’ executives have experienced. But there are real issues that need to be raised. How does Mylan justify having taxpayers foot the bill for these price increases — particularly after Bresch and the company successfully pushed legislation to encourage use of the EpiPen in the nation’s schools?

It’s critical drug prices be effectively addressed, as they consume nearly a quarter of the Medicaid and Medicare budgets.

Mylan spent about $4 million in 2012 and 2013 on lobbying for access for EpiPen generally and for legislation, including the 2013 School Access to Emergency Epinephrine Act, according to disclosure forms filed with the Office of the Clerk for the House of Representatives. Mylan also was the top corporate sponsor of a group called Food Allergy Research & Education. It was the key lobbying body that pushed the bill encouraging schools to stock epinephrine auto-injectors — EpiPen is by far the leading product.

“There does not appear to be any justification for the continual price increases of EpiPen,” Klobuchar, a Democrat, wrote to FTC chairwoman Edith Ramirez. “Manufacturing costs for the product have been stable and Mylan does not need to recover the product’s research and development costs because the product was on the market years before Mylan acquired it in 2007.” She’s right.

Don’t expect anything but indignation from Hillary Clinton. Mylan Inc. has a relationship going back to 2009 with The Clinton Foundation. Pay for play? As for Donald Trump, he has advocated lower drug prices and allowing importation from abroad in the past.

The “systemic” legislative remedies being floated are not sufficient at this point. It’s critical that drug prices be effectively addressed now, as they consume nearly a quarter of the Medicaid and Medicare budgets. They’re the most rapidly rising component of health care costs — a sector that is overall rising faster than any other sector of the federal budget or official inflation estimates.

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In addition to the FTC investigation, Klobuchar reportedly is calling for a Judiciary Committee hearing on EpiPen pricing that would produce the impetus needed to pass four bipartisan bills she’s co-sponsored. The legislation is meant to lower drug prices by increasing competition for all kinds of pharmaceuticals. Of course, the pharmaceutical lobby opposes all four bills.

One bill allows Medicare to negotiate drug prices with pharmaceutical companies. A second allows re-importation of U.S.-made drugs from Canada, where drug prices are significantly lower than in the U.S. The other two pieces of legislation address generic drugs — one forbids makers of brand-name drugs from paying to delay introduction of generics; the second speeds up the generic drug approval process.

These bills are too little too late.

Related: Keeping Drug Costs Low — It’s About Time

I have long advocated for a law that would prohibit any prescription drug from being sold in the U.S. for more than the lowest price of any OECD country as well as open importation from any country. But Karl Denninger, author of the popular Libertarian Blog, “The Market Ticker,” has repeatedly pointed out a simpler and immediately effective solution. It is particularly worthy of consideration, as it doesn’t require any new laws — 15 USC (United States Code) forbids under a 10-year per count felony prison term the attempt to monopolize, restrain trade or price fix.

While the law may now prohibit Americans from bringing prescription drugs from abroad, nowhere does that same law exempt drug makers from 15 USC. Put another way — while law and regulation prohibits Americans from reimporting drugs, they don’t grant drug makers an exemption to 15 USC prohibiting the restraint of trade or price-fixing. We Americans need to insist that the law be enforced — send the drug maker executives to jail and fine the companies as the law allows.

These drug makers have conspired with Congress and the executive branch so that an otherwise illegal act of restraint of trade is allowed. Our current fiscal crisis demands immediate action. We, the people, must demand our representatives act now — if not elect ones who will.

Dr. Ramin Oskoui, a cardiologist in the Washington, D.C., area, is CEO of Foxhall Cardiology PC and a regular contributor to LifeZette.

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