Epi(c) Outrage

epipen

In an election season where indignation and outrage are the postures du-jour, comes EpiPen, a medical device manufactured by Mylan drug company. A Facebook post yesterday, capsulized a headline from the website “Uncut”, “Big Pharma’s dirty secret: EpiPen was developed entirely with taxpayer money”, placed under the words, “CLASS WAR”.

I have no way of knowing if this story was concocted out of total ignorance or if the web site was simply waving a ‘ME TOO’ flag to the outrage crowd.  You can read the complete story at http://usuncut.com/class-war/epipen-taxpayer-money/

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For those who have been on a moon voyage for the past week while this device was filling air time on news shows between commercials, it was developed as a hand held device for fast injection of epinephrine into someone headed into anaphylactic shock.

(DISCLAIMER:  This is not intended as any vindication of big pharma; they have their own highly paid PR folks who do that.)

Something just didn’t sit right, so I decided to chase it down and learned the following:

  • It was invented by Sheldon Kaplan while employed by Survival Technology, Inc. in the early 70’s. He didn’t make a dime in royalties off of it.
  • Mylan acquired EpiPen in a purchase of the generic drug division from Merck in 2007.
  • Prior to that it sold for $57 each. Current price tag is in the mid 600’s depending upon which web site discount coupon you select.
  • Mylan CEO, Heather Bresch, is a daughter of West Virginia U.S. Senator, Joe Manchin. She began her career at Mylan as a secretary.
  • Sales took a huge upturn following President Obama’s signature on a law making federal funds available to schools who purchased a supply of EpiPens in 2013.

Since the device is not patented, I went searching for competition and learned that Teva Pharmaceuticals failed in their first attempt to obtain regulatory approval for a competitive product and Sanofi recalled its product because it may be delivering an incorrect dosage.

Conclusions:

  • FDA approvals take years and are required for sales of generic drugs as well as patented medicines.
  • Mylan was extremely fortunate to be the only company with a product ready to go upon execution of the 2013 law. Absent that law, you would have never heard of EpiPens. Imagine whatever political influence you want.
  • The pricing may be unconscionable but a CEO’s responsibility is to the shareholders who may take a different position when they analyze the PR damage it has done to their company. As for CEO salary, that’s between the CEO and the board of directors.
  • It was not developed at taxpayer expense.

This experience points up two big weaknesses in our medical delivery systems.

  1. Extraordinary time and expense to complete the FDA approval process.
  2. Total lack of incentive for patients to shop for best prices.

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