Enough with the elector process. I’m moving on.
EpiPen “With a Little Help From My Friends”
EpiPen has recently attracted attention due to the fact that the price for a pack of two has increased about 600% in less than 10 years. Mylan, owners of EpiPen, has responded by pointing out that many of their customers pay nothing for the drug because of insurance coverage. Really, if a tree falls in the woods, does it make a sound argument.
Most of the “corporate” mainstream news media point the finger at greedy corporations who are not regulated enough. Instead of reporting the history of how the price of the EpiPen has risen the media searches for convenient scapegoats or villain to rally its troops against. Incomplete reporting is irresponsible and distorts reality. Sloppy reporting shields the real culprits, crony capitalism and the bureaucrats, at the expense of the innocent. In this case the free markets, true capitalism and the consumer.
Monopolies exist when competition is eliminated. With no competitors a firm can raise their prices without a competing companies entering the market to give consumers what they want at a lower price. As it turns out, Mylan has friends that help to keep competitors out of the market. Their friends are the FDA, the U.S. patent system and the regulated insurance industry. The common denominator in the fore mentioned trio is the State.
“With Help From My Friends” Mylan has been able to steadily increase the price of EpiPens without significant market repercussions. Why? Because the alternatives are few and far between. The EpiPen is a device that easily and safely injects epinephrine to quickly open up airways for people undergoing severe anaphylaxis because of an extreme allergy. It has saved the lives of countless people who are allergic to bee stings, certain foods, or other drugs because it can be administered on the spot by somebody without any medical training.
Epinephrine cost is cheap. A dose of epinephrine is just a few cents. The barrier that has allowed the EpiPen’s to increase their price is its delivery system. The auto-injecting device is owned by Mylan. So, in order to compete with Mylan a new injector system device has to be designed, tested and approved. This process, coupled with the FDA red tape, has proven to be too expensive, time consuming and difficult for EpiPen competitors.
Examples of attempts to enter the “EpiPen” market: “A French pharmaceutical company offered an electronic device that actually talks people through the steps of administering the drug, but it was recalled because of concerns about it delivering the required dose. Just this year, Teva Pharmaceutical’s attempt at bringing a generic epinephrine injector to market in the US was blocked by the FDA. Adrenaclick and Twinject were unable to get insurance companies on board and so discontinued their injectors in 2012.
Adrenaclick has since come back, but it is still not covered by many insurance plans, and the FDA has made it illegal for pharmacies to substitute Adrenaclick as a generic alternative to EpiPen. Another company tried to sidestep the whole auto-injector patent barrier by offering prefilled syringes, but the FDA has stalled them, too.” 1
As Mylan’s “friends” took care of the competition Mylan increased the price of EpiPens. To “add salt to the wound” local, state and federal laws have made it mandatory to have EpiPens present on the premises of many public and private locals. Some venues actually require more that one EpiPen. The businesses and locations include schools, restaurants and cafeterias.
So, government intervention has not only created the environment for price gouging to occur they have produced and expanded the market for a “friend’s” product. Monopolies exist due to the fact that there is no competition or the competition has been eliminated. This situation exemplifies how government regulations, patents, licenses and other imposed restriction create monopolies. Is this fair to the consumer or do regulation protect the profits of the chosen?
Free markets and capitalism is not to blame government regulations are. Companies must be allowed to compete on even ground in a free market. Eliminating the regulation imposed by the FDA, the U.S. patent system and the insurance industry will ensure a cheap and affective solution for severe allergic reaction.
If intellectual property rights, copyrights and patents, are removed the consumer benefits. Intellectual property rights ensure unjust pricing and profit while eliminating competition by creating monopolies. Laws are made to protect individuals not to guarantee profits.
1 Jonathan Newman “The Lack of EpiPen Competitors is the FDA’s Fault” Mises Institute