Posted by Steven Catudal.
How much money should it cost to save someone’s life? Should companies be allowed to create prices on life-saving medications? Over the past few months, there has been more and more cases of pharmaceutical companies taking advantage of their monopoly and increasing prices. The price of an EpiPen, a device used to save someone from severe allergic reactions, has increased 500% in recent years according to the New York Times. Limited regulations and a lack of competition are causing US lawmakers to demand investigations about this large increase in price.
Mylan, the company now producing EpiPen’s, received the item through a merger with a generic German pharmaceutical company. When purchased, the German manufacturer would sell the EpiPen for around $57. Ever since the day of the merger, Mylan has been increasing the price. In May 2016, the price of an EpiPen was $608.61. Lawyers and politicians have been demanding that the price is decreased. They are investigating Mylan for breaking anti-trust laws and gouging customers. New York attorney general Eric Schneiderman said that, “No child’s life should be put at risk because a parent, school or health care provider cannot afford a simple, life-saving device because of a drugmaker’s anti-competitive practices.” Another opponent of Mylan’s strategy, Hilary Clinton, raised arguments against Mylan’s unethicality for charging so much for a life-saving medication.
The EpiPen now brings in more than $1 billion every year compared to the $200 million that it made for the prior German pharmaceutical company. As revenues have spiked, so has the salary of Mylan CEO Heather Bresch. She now earns more than $18 million through her salary and other compensations. That is 671% more than she earned in 2007, when the price spike began. When confronted with the increased price, Bresch defended herself saying that, “No one’s more frustrated than me.” She went on to explain that the high prices are caused by the United States health-care system. In comparison, EpiPens sold in Europe, are subsidized due to regulations on pharmaceutical companies. Bresch has the opportunity to make a change; she can make the EpiPen more affordable once again, but she cannot blame anyone but herself for this large jump. Once an EpiPen’s price returns back to a reasonable cost, then all people with severe allergies will have the opportunity to afford medication necessary to save their lives.
Steven is a member of The Gerald P. Buccino ’63 Center for Leadership Development at the Stillman School of Business, Seton Hall University, Class of 2020.
Sources:
http://www.cnbc.com/2016/08/25/mylan-expands-epipen-cost-cutting-programs-after-charges-of-price-gouging.html