College of Law > About > Centers & Institutes > Mary and Michael Jaharis Health Law Institute > e-Pulse Blog > The EpiPen: Big Pharma’s Latest Scandal
By Tamalyn Wandler /
October 21, 2016 /
Posted in: HLI News /
Pharmaceutical companies and their
executives have come under fire in recent headlines due to the astonishing
price increases of the drugs these companies manufacture. In 2015, Martin Shkreli, the former CEO of
Turing Pharmaceuticals, was dubbed one of the most hated people in America
after he notoriously raised the price of a necessary HIV drug from $13.50 a pill to $750.00.
Last February, Shkreli participated in a Congressional Committee Hearing to
discuss the price hike. Shkreli pled the fifth, and the hearing was cut short.
On September 21, 2016, another pharmaceutical
giant sat before the House Oversight and Government Reform Committee. Heather Bresch, the CEO of Mylan
Pharmaceuticals, was grilled by Committee members for nearly six and a half hours regarding
the company’s recent price surge of one of its most lifesaving products, the
epinephrine auto-injector, better known as the EpiPen. In 2007, Mylan acquired the EpiPen, and since
then, has raised the price fifteen times.
The medication went from $100.00 per two pack to a little over $600.00,
a 500% price increase in nine years. While the prices of the medication soared so
did the profits for the company, as well as Bresch’s salary. In 2015, Bresch’s total compensation was nearly $19 million, an extreme
increase from the $2.4 million she earned in 2007.
Although the Committee asked pointed
questions during the hearing, they were met with biased and often incoherent
responses from Bresch. The Committee questioned Bresch on the legitimacy of her mathematical
calculations, stating that it simply did not add up. Bresch testified that the company only made a
$100.00 profit for every two pack of EpiPens it sells. She further justified the price increase by blaming the complexities of the American healthcare system. Prior to the hearings, in an August interview
with the New York Times, Bresch supported the price increase by stating, “I am running a business. I am a
for-profit business. I am not hiding from that.” She
further discussed how Mylan’s decision to increase the price of EpiPen was nothing like Shrekli's decision was to increase the price of
Daraprim. She states that the price of
EpiPens has increased over the last nine years, unlike the price of Daraprim
which skyrocketed overnight. Although
this may be true, the extreme increase in the price of EpiPen still hinders the
average person’s ability to purchase the medicine.
Even though individuals with insurance are able to obtain the medicine at a
lower upfront cost, the remaining costs covered by the insurance company will
be funneled into higher premiums for the beneficiaries. One Committee member, Elijah Cummings, stated
with respect to the discounts and programs that Bresch eluded to, “even with withering criticism and
outcries, these companies never, ever, ever, never lowered their prices.”
Although the American people appear
to be at the mercy of pharmaceutical companies’ discretion when it comes to
pricing, there is a potential silver lining in the form of forthcoming policy
change. Senators Tammy Baldwin and John
McCain introduced the bipartisan Fair Accountability and Innovative
Research Drug Pricing Act
in hopes of increasing transparency among pharmaceutical companies. The Act would require drug manufacturers to submit a report to the
Secretary for each price increase of a qualifying drug that will result in an
increase in the average manufacturer price of that drug that is equal to ten
percent or more over a twelve-month period.
The report must be submitted no later than thirty days prior to the
planned pricing increase. The punishment for not complying with the Act and
submitting the appropriate reports is a $100,000 penalty for each day the
violation goes unacknowledged.
Regardless of whether or not the pharmaceutical
companies’ decision to increase the price of invaluable drugs is purely
self-interested or can be attributed to the healthcare system in America, it is
evident that necessary change is imminent. Expecting individuals to be able to afford
medications after a 500% price increase, even with insurance, is ludicrous. Although access to healthcare in the United
States has increased post Affordable Care Act, if the price of necessary
medication continues to skyrocket accessibility will not be the country’s
from South Jersey, Tamalyn attended Loyola University Chicago where she
received a B.A. in Political Science and a B.S. in Criminal Justice &
Criminology. A Health Law Fellow
and current 3L from DePaul University College of Law, she has a passion
for Health Law Policy and Healthcare Compliance.