Martin Dyckman: EpiPen debacle demonstrates need for price controls
“Your money or your life,” a laugh line for the great comedian Jack Benny, must be the business model of the American pharmaceutical industry. It’s time for a serious national discussion on establishing price controls over Big Pharma. The latest provocation is the staggering increase in the price of the EpiPen, a necessity for people with life-threatening food and bee-sting allergies. The two-dose pack that cost about $100 in 2007 is priced at around $600 now. A different company sells the same product in France for about $85. The self-injecting device was originally developed for the U.S. military. The drug it contains, epinephrine, actually costs about $1 per dose to manufacture, according to Bloomberg Businessweek. All this is why Heather Bresch, the CEO of patent holder Mylan Pharmaceuticals and the genius behind the price rise, has for the moment displaced the smirking Martin Shkreli as the public face of her ruthless industry. It doesn’t help that image that her compensation swelled nearly eightfold, from some $2.5 million to nearly $19 million, while the EpiPen was becoming six times more expensive. Or that the face of the customer who’s being told “your money or your life” is most often a schoolchild. Even if there’s family insurance, most plans these days have enormous deductibles And yes, Mylan is another of those companies that ran out on U.S. residency — in this case to the Netherlands — to reduce its taxes. Unlike Shkreli, a corporate takeover rogue who skyjacked the price of a vital anti-parasitic drug for people with compromised immune systems, Bresch is a major figure in the pharmaceutical industry. In that respect, her profiteering is more significant, and more worrisome, than his. Responding to a social media firestorm that yielded some 70,000 online signatures, 100,000 letters to Congress, and serious attention in the media, Bresch announced Mylan will give some customers larger vouchers to buy EpiPens at discounted prices. But those apparently aren’t available to people on Medicare, soldiers and veterans, and millions of others who have no insurance. That’s no substitute for reducing the base price to something reasonable. Reeling under public pressure, Mylan announced Monday that it will offer a generic version for about $300. That’s still three times what it cost in 2007, more than three times the price of an equivalent product in France, and 300 times the intrinsic value of the medicine the device contains. Unless you’re one of those legendary folks who never get sick until they need the undertaker, you have had your own experiences with drug price sticker shocks. And if you’re on Medicare, it takes only a few of those to reach the coverage gap. That Medicare or private insurance may cushion those sticker shocks is no excuse for them. Remember who’s paying for Medicare and for the insurance premiums. In most cases, these outrageously priced drugs are sole-source products. Even when there are generic alternatives, Big Pharma has been ingenious about hyping those costs too. Although there are many players in the industry, their individual control of specific drugs means that are, essentially, monopolies. There are rivals to the EpiPen, but Mylan still controls about 85 percent of that market, according to Bloomberg. That’s a monopoly by any definition. One factor is Mylan’s highly successful campaign to persuade schools to stock the device, with the encouragement of Congress and the Food and Drug Administration. The so-called “discipline of the market” is an oxymoron in a monopoly market. That’s why price controls would not only be appropriate, but also necessary. Price control is a powerful weapon that should be used rarely, not least because it can backfire badly. Venezuela knows that now. But there’s ample precedent in the United States for price controls in a monopolized industry that, like pharmaceuticals, is essential to life and health. I’m speaking of the public utilities — electricity, gas, and often water, in which effective competition would be wildly inefficient and costly. The standard model for regulating utilities is to establish a reasonable rate of return on investment and operating expenses, and calculate allowable profit on that. In Big Pharma’s case, companies should be entitled to credit for what they spend to develop and test new drugs. They might even spend more on the antibiotic research they presently shun as unprofitable. This is a grave issue because of the rapid evolution of antibiotic-resistant pathogens. I didn’t mention advertising. Ours is not only the country with the highest drug prices, but also the only one where manufacturers can spend millions advertising drugs you didn’t know you needed and for which the disclaimers — how they might sicken or even kill you — command more time and space than the alleged benefits. Given how Big Pharma usually leads the pack in campaign spending and lobbying expenses, the prospects for price controls must be rated slight at best. But I’d like to hear what Hillary Clinton has to say on this. She’s gotten nearly $1 million in Pharma money this election cycle. That’s more than anyone else. It would be interesting also to hear from Sen. Joe Manchin, D-W.Va. Bresch is his daughter. ___ Martin Dyckman is a retired associate editor of the newspaper now known as the Tampa Bay Times. He lives in suburban Asheville, North Carolina.
Linda Cunningham: Martin Shkreli’s mom ought be snatching him bald
Pity Martin Shkreli’s mother. Don’t you know she just wants to snatch that boy bald? You know Shkreli, right? The 33-year-old brat-turned-hedge-fund-fraudster who bought a cheap generic drug and raised its price to the stratosphere and then rolled his eyes at a congressional committee this past week? Yeah, that one. And, if you’ve somehow missed him and the hand-washing compulsion that follows, Matthew Herper at Forbes has a bang-up profile from back in September. Or you can watch the arrogant smirking and eye-rolling here. Oh, heck, just Google or Twitter him yourself. There’s plenty out there. Back to mom. There must be a mom (and dad) around somewhere because, well, because there’s a Martin born on April 1, 1983. So, unless Martin is one giant April Fool’s joke, there are parental units somewhere, though I could find no references to them in an hour of online searching. Martin’s mom has to be beside herself right now. We mothers are supposed to love our kids, be there for them and generally be the ones who say things like “he was such a sweet boy. I can’t imagine his being so rude.” Uh, yeah, rude. That would be the word. Martin Shkreli is rude, crude and socially unacceptable, as my dear old dad used to say about some of my college neighbors. And I’m betting it’s all mom’s fault because, of course, it always is. A Facebook friend — also a mother of two about Shkreli’s age — posted this Friday morning: “O.K. I’ve had it with bad behavior and want to form a ‘Mom Squad’ to perform attitude adjustments for those who obviously weren’t raised properly. “First on my list: Pharma Bro. Had I been at yesterday’s Congressional hearing, I would have leaned behind Martin Shkreli and wiped that smirk off his face and made him apologize for his snarky behavior. Go ahead and plead the Fifth, Martin. Just do it with some dignity and respect. Who’s in on this crusade? Who needs a visit from the ‘Mom Squad’?” Seconds, and I mean, seconds, later a dozen moms (and one dad) shouted, “I’m in.” Moms know that smarmy, self-centered, eye-rolling smirk and we have to sit on our hands to keep from slapping it off. Bless his little heart, that Martin needs a mom to be all over him, slapping like white on rice, because he’s gotten way too big for his britches. He sure has way more money than sense, doncha think? Yeah, I think. And, I’m also thinking, wherever she is, it’s not mom’s fault. Or, at least, she’s going to get a pass from me, poor thing. Martin Shkreli’s one more in a lineup of self-made, arrogant, me-first pseudo-celebrities with more money than brains and more media addiction than compassion. These are men (and the occasional woman) with holes in their souls. There’s a bunch of them out there; at least half a dozen are running for U.S. president. And every one of them — except Jeb Bush, whose mama really would snatch him bald if he did such things — needs a visit from the Mom Squad. • • • Linda Grist Cunningham is editor and proprietor of KeyWestWatch Media LLC, a digital management solutions company, specializing in small businesses. She’s got a son around Shkreli’s age and he’d not dare roll his eyes in a congressional hearing.
