College of Law > Academics > Centers, Institutes & Initiatives > Mary and Michael Jaharis Health Law Institute > e-Pulse Blog > The EpiPen: Big Pharma’s Latest Scandal

The EpiPen: Big Pharma’s Latest Scandal

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 Ac​t 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 punishme​nt 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 biggest concern.

Originally 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.