Last week, the left lost its mind because the price of EpiPens skyrocketed. Hillary Clinton quickly jumped on the story, characterizing it as a failure of capitalism: “Millions of Americans with severe reactions rely on their EpiPens…Over the last several years, Mylan Pharmaceuticals has increased the price of EpiPens by more than 400%...That’s outrageous – and it’s just the latest troubling example of a company taking advantage of its consumers.”
Naturally, Hillary called for more regulation.
But there’s a reason that EpiPens have skyrocketed in price, and it’s not because the company is super duper mean to kids who suffer from bee stings. Here are the two reasons why EpiPens got so expensive so fast:
1. Insurance Coverage Masked The Increase. Insurers and employers have typically negotiated with Mylan over EpiPen prices. That means that end users had no clue about the price increases until they lost their insurance, or until deductibles jumped. So thanks, Obamacare, for forcing parents into position to pay cash for EpiPens, or pay more for insurance coverage. Mylan has given coupons to consumers for co-payments on commercial insurance, and they’ve handed out 700,000 EpiPens to public schools for free. But Obamacare has made people feel the pain via their insurance companies. As Mylan CEO Heather Bresch says, “We recognize the significant burden on patients from continued, rising insurance premiums and being forced to pay the full list price for medicines at the pharmacy counter.”
2. The Federal Government Prevents Competition. EpiPen could only jack up prices because they had no competition in the marketplace. That’s odd, given that epinephrine isn’t patented and has been synthesized for well over a century. In Europe, there are multiple competitors to EpiPen, but in the United States, the FDA has prevented competitors from entering the market – and the biggest competitor to EpiPen, Adrenaclick, is barred from substitution for EpiPen in prescriptions, according to SlateStarCodex. Obviously, EpiPen lobbies to prevent competition, and so far, they’ve succeeded.
So, the solution isn’t to remove government regulations that would ensure more competition in the insurance and medical device marketplace. Instead, the solution is price controls. Which will make availability of EpiPens lower, not higher – and will, in the end, destroy the marketplace altogether.