Why Are We Paying $300 for an EpiPen That Holds Only $1 Worth of Medicine?
Each EpiPen reportedly contains only $1 worth of medicine. Mylan has a near monopoly in the U.S., and the company has seen its profits from the EpiPen alone skyrocket to $1 billion a year. Meanwhile, Mylan CEO Heather Bresch’s total compensation has spiked from around $2.5 million in 2007 to almost $19 million today. In response to the price hikes, the consumer advocacy group Public Citizen and its allies will deliver a petition signed by approximately 600,000 people to Mylan’s headquarters in Canonsburg, Pennsylvania, today demanding further price cuts. For more, we speak with Peter Maybarduk, director of Public Citizen’s Global Access to Medicines Program.
This is a rush transcript. Copy may not be in its final form.
AMY GOODMAN: Peter Maybarduk, explain exactly what has happened here. Explain what the price increase was and how people are organizing now. What is Heather Bresch explaining here?
PETER MAYBARDUK: Well, the drug companies want to point fingers at the insurers, and the insurers want to point fingers at the drug companies. But it’s all convoluted mechanisms to avoid plain talk about price. This is a 100-year-old drug in a 40-year-old injection technology that was invented in connection with Department of Defense projects, meaning that taxpayers already paid for a considerable amount of the research associated with this—with this product. It hit the market. When Mylan acquired the rights, the product cost $100. Now it’s up to $600. The increases in EpiPen prices have more or less tracked the increases in the Mylan CEO’s pay, executive compensation, over that period of time. There haven’t been significant improvements to that product, as was mentioned, in the time, so we’re not paying for—we’re not paying for innovation. We’re paying for price gouging. We’re paying for Mylan’s shameful greed. And today, Public Citizen will deliver—I think the number is increasing—closer to 1 million signatures, hopefully, if you help us out, to Mylan’s corporate headquarters outside Pittsburgh, demanding that that price be reduced. In other words, we can talk—Mylan wants to talk about coupons and patient assistance programs and this new, absolutely bizarre move of introducing a generic version of its essentially generic own product. And—but what—the one thing it won’t do, the one thing Mylan refuses to do, is have plain talk about price and just reduce the price. That would be the simplest, most effective thing to do to ensure that everyone who needs an EpiPen can get one and that the cost burden that we all share, paying into our healthcare system, is reduced. AMY GOODMAN: Can you explain that further, what they have done, as opposed to just reducing the price?
PETER MAYBARDUK: Well, yesterday, Mylan announced that it was going to introduce what it called a generic EpiPen. Now, this is a little strange, as the drug isn’t patented, and it’s not patents that are keeping competitors primarily off the market. What they mean is, they’ll have—they’ve built a big brand reputation through very aggressive marketing around EpiPen, and they intend to retain a premium market, wherein they can sell for this $600 for the branded EpiPen. But at the same time, they’re going to introduce an identical product, doing the exact same thing in the exact same way, no differences between the product, except it won’t have the EpiPen brand. And they’re going to sell that for $300. And that’s their solution, so-called, to the criticism, rather than simply reducing the price of the EpiPen in the first place down to a more reasonable level, say $100, which is still a very profitable price. It’s the price that many other wealthy countries pay, and was the price at which the product hit the market a decade ago.
AMY GOODMAN: They’re also talking about coupons that people can get. Can you explain what that is?
PETER MAYBARDUK: Well, so, if a patient figures out how to use the coupon, they can reduce their copay at the pharmacy. And Mylan says it’s going to enroll more people in patient assistance programs to reduce the price, in theory, that consumers are paying at the counter. But not everyone will use the programs, and it doesn’t do anything—those methods don’t do anything to reduce the cost that we’re all paying into the system for the $600 EpiPen. If you don’t have insurance or if you have a high copay, you still may wind up paying very high prices for these EpiPens.
AMY GOODMAN: Mylan did find one prominent defender: Martin Shkreli. Last [year], you might remember, the former hedge fund manager sparked national outrage after he hiked the price of a life-saving drug by more than 5,000 percent. Prosecutors also accused Martin Shkreli of orchestrating a Ponzi-like scheme at his former hedge fund and his startup drug company, Turing Pharmaceuticals. Well, Shkreli is back in the news weighing in on the EpiPen controversy. Here, he’s speaking to CBS Minnesota local station WCCO. MARTIN SHKRELI: Mylan’s a good guy. They have one product where they’re finally starting to make a little bit of money, and everyone’s going crazy over it. VINITA NAIR: These are life-saving drugs. People don’t have a choice whether they can buy them or not.
MARTIN SHKRELI: Yeah, well, that’s up to insurance to pay for them. Like I said, it’s $300 a pen, $300. My iPhone’s $700, OK? So, it’s a—
VINITA NAIR: But you don’t need an iPhone to exist.
MARTIN SHKRELI: Yeah, that doesn’t matter, though, because it’s $300, and 90 percent of Americans are insured.
AMY GOODMAN: Last week, Martin Shkreli tweeted, "With 8% margins, Mylan is close to breaking even. Do we want them to lose $? Sole supplier of a life-saving drug should have a better margin." Shkreli later tweeted, quote, "Mylan: 9% net margin (life saving drugs) Viacom: 15%, (Reality TV) Altria (Cigarettes): 21%." Your response to this, Peter? PETER MAYBARDUK: Well, Mylan’s primary contribution to this product is simply aggressive marketing. They’re not the ones who really invented the technology behind this, and any investments made in the chain are long since expired. And this is a price that keeps going up without justification. Mylan is taking advantage of their monopolistic position in the market. And that’s the broader—that’s the systemic problem that we all face. It’s the number one reason that drug prices are so high in the United States, is that we have government-granted monopolies in many areas, de facto monopolies or individuals like Shkreli and companies like Mylan that have figured out how to corner a market, and they charge as much as we and our health system collectively will pay to care for our—care for our loved ones. And that’s the business model, right? It’s profit maximizing.
AMY GOODMAN: So, what exactly are you doing today?
PETER MAYBARDUK: So, today, Public Citizen is going to deliver a petition to Mylan corporate headquarters demanding that Mylan simply cut the price, cut the obfuscation, cut the convoluted talk about all these alternative mechanisms, and simply cut the price of EpiPens so that we can all afford it and our healthcare bills ultimately go down.