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August 31, 2016 by Ray Bourhis

Most Vulnerable Consumers Held Hostage by Big Pharm, CONGRESS, and the FDA

pharmacy-epipen-high-cost-fdaEpiPen is a medical device for self-administration of life-saving medication to people with severe allergic reactions and asthma. It also is the next big spotlight for Congressionally-supported corporate abuse. This time, Mylan Corporation is holding the lives of consumers hostage, a good portion of them children, by gouging patients with incomprehensible and unjustified increases in cost. Simply because they can.

Manufactured by the giant Mylan Corporation, EpiPen delivers 25 cents worth (or less) of epinephrine. The cost of the patented plastic injector, including packaging and advertising, is probably no more than $15-$20.

In 2009 a pack of two pens cost $100. A few years later, $300. In May 2016, the cost of 2 pens was raised to $600, for no reason other than increasing profits. Mylan’s CEO salaries have also increased by an estimated 600+%.

But how was Mylan able to avoid market repercussions? By coercing the FDA into a strangling patent on the delivery method (the pen), they have eliminated the competition. Any would-be competitors are forced to design, trial, and prove new methods of delivery, then paddle through a sea of  FDA red tape. Then they must gain support of the insurance industry, where Mylan also has bedfellows. Thus far, the major competitors have either given up or gone out of business.

Would-be competitors Twinject and Adrenaclick discontinued their products in 2012 after failing to gain insurance company support.

Earlier this year, Teva Pharmaceutical’s attempt to introduce a generic injector into the market was blocked by the FDA.

The FDA’s response to recent public outcry, (including schools where access to the EpiPen is vital), was to allow Adrenaclick back on the market. But they also have made it illegal for pharmacies to offer their product as a substitute for EpiPen.

A handful of Congressional members recently introduced an investigation into Mylan’s activities, but it was blocked on the floor, protecting the pharmaceutical giant.

Mylan has simply used their monopoly on a vital product to do as they please. Mylan’s actions are especially egregious since taxpayers bore the burden development in the first place (the EpiPen was originally developed by the military.)

INSURERS PAY, NOT THE CONSUMER

In a frustrating display of greed, Mylan claims the consumer is not affected by these exorbitant hikes because insurers pay for the product. In turn, insurers are happy to lie in bed with Mylan, as they also receive a piece of the massive profit. Meanwhile, the FDA caters to their bagmen and continues to side with the money.

Mylan’s first response was to offer a discount coupon, worth $300, to consumers. But the discount coupon was only available to non and under-insured consumers; and Mylan is aware of the low redemption rate of pharmaceutical coupons. The benefit of the coupon system to Mylan is that they still would receive full compensation from the insurance companies—no loss would be suffered.

When that didn’t fly with Congress, Mylan miraculously became capable of offering a generic version, with a $300 price tag. As a generic, the new “product” does not have to go through the onerous FDA approval process (that they insisted others complete) because the deliver method is the same. Again, Mylan will reap their full profit, and still make great return. Since they don’t advertise generics, the percentage of profit is actually higher than the brand product. For people who want to pay for the name, the exhorbitant profit remains untouched.

This abuse of power by billionaire corporations and their bagmen should be an object lesson, and a warning, for consumers. Read Billionaires and Bagmen and find out why.

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