Been following the recent discussion over the huge price increase in EpiPens? What do you think… natural response to market forces? Public health disaster in progress? Both? Neither?
How do the tools of population health science help you understand the impact of pharmaceutical/medical device pricing on population health and disparities?
Source: The EpiPen Drama Shows What’s Wrong With How Drugs Are Priced – Bloomberg
The Fantasy Equation 
To me, this article demonstrates a few things. First of all, at its core, public health is truly an endeavor in improving the health and well-being of everyone. And this issue demonstrates that it is a system that simply cannot function when any of its players come with intentions of greed or selfishness. Clearly, there is plenty of evidence of greediness on the part of Bresch (which is made evident repeatedly: such as through her unsupported claim that it is due compensation and her refusal to entirely abandon the exorbitant price) and the pharmacy benefit managers (who are implicated in decreasing coverage if the price is lowered). Secondly, as we have discussed a lot in class, it demonstrates how truly diverse the actors and factors involved in public health are. With this article’s discussion of the economics of the pharmaceutical industry, it cannot be completed without the inclusion of the role of one’s socio-economic status, the interaction of one’s employment conditions (specifically referring to insurance coverage here), the role of policy and government in both creating and solving the problem, and the accessibility of health care. And the factors that they included are certainly just a hint of all those involved in this public health issue.
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Thanks for your comment. It’s definitely fair to criticize Bresch’s response – but there is a deeper underlying fundamental issue: for-profit entities have a duty to act in the best interests of their shareholders — not the best interests of customers or society. I see this problem as more of a failure of government to fulfill its role of intervening whenever market failures mean that the market outcome is far from socially optimal. We can’t expect a leopard to change its spots, why expect a for-profit company to do anything other than seek profit? Perhaps it’s time for the FDA to seek authorization to regulate profits and authorize expedited production for critical drugs that are single-source?
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In my opinion, there is validity in both of the previous comments. Undoubtedly a spike in price for a device that is often a matter of life or death for some individuals seems to confirm the business-first, health-second point of view. However, it does look to be primarily a failure of the government’s role to intervene when a market failure, such as this, arises. This article is reminiscent of what Martin Shkreli did as the CEO of Turing Pharmaceuticals. He was dubbed the ‘most-hated man in America’ after raising the AIDS drug, Daraprim, from $13.50 a pill to $750 overnight. As I recall, the public outcry was so loud that he was forced to lower the price. Also, I believe I read that a competing company put out a similar product in response and sold it for a dollar. Maybe someone on this blog can dig deeper into the specifics and report back. Nevertheless, I do tend to agree that when market failures exist, it is the government’s responsibility to act fast and intervene to protect the public good. Moreover, from an economic standpoint, it is difficult for companies who are profit-seeking to change the meaning of their very existence. Just take a look at insurance companies. They are profit seeking entities that virtually everyone loathes, but that very few can live without. It seems futile to suggest ‘that’s just the way it is’, but sometimes maybe that is all we can use as an excuse? Any additional thoughts?
– Joe
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I agree with many of the above comments. I find it unfortunate that corporate greed has caused the allocation of life-saving drugs based on wealth rather than need. While the altruistic creation and distribution of drugs at reasonable prices could solve this problem, I don’t think it’s currently feasible. As Kerry mentioned, diverse factors contribute to the complexity of the pharmaceutical industry. The agreed upon pricing for drugs, the money earmarked for drug research, and the time it takes for useable drugs to pass FDA approval create a chain of incentives that have led to the current problem; Pharmaceutical companies must generate large revenues from a limited selection of products.
Government negotiation with pharmaceutical companies has had some positive impacts on drug pricing in other countries. Bloomberg recently published an article titled ‘Why the $600 EpiPen Costs $69 in Britain.’ This article makes some headway in explaining the differences in the way that different governments deal with the pharmaceutical industry. Government negotiation with the pharmaceutical industry could lower healthcare costs and take financial pressures off of patients. However, some people believe that these kinds of negotiations would cut away at capitalist ideals.
As Joe mentioned in his comment, price hikes for life-saving drugs happen somewhat frequently. I looked into the competing company that sold Daraprim for a dollar, I found that ‘Imprimis’ sold it at $99 for a 100 count bottle, but all the facts weren’t clear online.
I believe that it will take both public outcry and new government policies to solve this problem.
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For those following the EpiPen drama, here is a recent follow-up article that is interesting. It is reassuring to see the quick action taking place and that settlements are being finalized.
http://www.nytimes.com/2016/10/08/business/epipen-mylan-justice-department-settlement.html?_r=0
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