from Hacker News

The EpiPen, a Case Study in Health System Dysfunction

by ChazDazzle on 8/27/16, 12:47 PM with 66 comments

  • by adocracy on 8/27/16, 1:42 PM

    It's unfortunate the NYT story doesn't get into the billings process as part of the dysfunction. It makes me wonder how the pricing is then negotiated with the insurance companies. Did they set the retail price so high because the insurance companies were refusing to pay a workable price? Mylan has already commented that most EpiPens are paid through insurance, and there's the "billed rate" and "paid rate" on claims reports which often shows outrageous retail prices by health providers and then the negotiated rate the insurance company actually paid. Mylan's "quick" offer of a $300 discount to individual payers appears to keep in line with this and potentially not impact the insurance claim issue, but does anyone have any evidence that this theory is mistaken?

  • by jcbeard on 8/27/16, 1:17 PM

    "When Mylan bought it, EpiPens cost about $57 each."

    I can concur. I have a family member I purchase these for. At first, it was like...okay, $50 after insurance. Now $100 after insurance. The thing is...nobody really seems to care until things spiral out of control. Who the hell is watching our backs in America? Is it the FDA, the FTC, Congress (likely too busy defunding AMA to care), the DoJ? No idea. I wonder if gov't agencies like the DoD who stock tons of epipens pay the same prices that we the public do? Does the DoD purchase from another market to get out of the huge sticker price? I'm curious to see how many people in the gov't get around purchasing these in the US for their own agencies yet didn't raise extreme alarm at the ballooning prices for the American consumers.

  • by endswapper on 8/27/16, 1:01 PM

    This is concerning on so many levels because there are multiple agencies that are supposed to oversea and simply avoid issues like this.

    In principle I am opposed to regulation, but in this case, where all other measures have failed, I say regulate away.

    I want to call out Heather Bresch, Mylan CEO, by name because she and Martin Shkreli are the problem as well as any investor or board member that doesn't steer them back to being human.

    This comes down to life and death for people. The instrument is simple, accessible and cheap. This doesn't make the instrument more valuable, but more necessary. Mylan is simply exploiting its customer base temporarily caught in the middle.

  • by petilon on 8/27/16, 3:15 PM

    The World Trade Organization has a provision known as "Compulsory Licensing" which can be used in extraordinary situations such as this. Compulsory licensing is when a government allows someone else to produce the patented product or process without the consent of the patent owner.

    A few years ago, India's government authorized a drug manufacturer to make and sell a generic copy of a patented Bayer cancer drug because the price charged by Bayer was unaffordable to most of the nation. The US pharmaceutical industry has been up in arms about this, and has been exerting pressure on India to stop this practice. But abuses of the system by Mylan (with EpiPen), Turing (with Daraprim) and others would seem to justify the Indian practice.

    In fact the US would do well to copy India's model. Citizens should be able to sue corporations for egregious abuses of the patent system, and courts should be able to provide relief in such cases by granting a compulsory license of a drug patent to a generic maker.

    Read about compulsory licensing here: https://www.wto.org/english/tratop_e/trips_e/public_health_f...

    Read about India granting compulsory license to Bayer cancer drug here: http://www.nytimes.com/2012/03/13/business/global/india-over...

  • by rokosbasilisk on 8/27/16, 1:34 PM

    Isnt this a much more simple tale of greed and corruption. the ceo is the daughter of a democrat senator and lobbied big government the jacked hwr salary 600x. Just another shkrelli, maybe even worse because she lobbied for schools to have them.

  • by kirrent on 8/27/16, 2:06 PM

    The majority of the comments here are interesting to me because they're talking about the cost of an epi-pen after insurance. The problem doesn't seem to be some mismatch of the interplay between drug price and insurance rebate but just how incredibly expensive an epi-pen is in America because of a lack of collective bargaining on price.

    For comparison, here in Australia, the dispensed price for an epi-pen is 96.57AUD which includes everything, even the maximum markup from the pharmacist (as far as I understand the pricing mechanisms). Of course, depending on insurance arrangements and personal circumstances you'll end up paying less with a maximum of 38.30AUD out of pocket but that's a different part of the system.

    I don't see how the dysfunction is any of the things mentioned in this article as opposed to the ridiculous prices insurance companies and patients are being charged for it. Many drugs expire quickly, are hard to administer, and are difficult to make. All that means is that we need them done well and we need to pay the least we can.

  • by golergka on 8/27/16, 2:25 PM

    The most interesting thing here would be the lack of competition, but the article, which was pretends to be a "case study", just leaves it at "various reasons". What the hell? It's not like an individual company's responsible for keeping the price sane; it should be kept down by the whole market — and if the market's malfunctioning, government's to blame, not the company.

  • by Eric_WVGG on 8/27/16, 3:39 PM

    I've got a question about price caps, would appreciate a non-trolly/non-sarcastic answer if anyone is informed on the topic.

    We know that epi-pens cost under $50 to make, because they're sold profitably in Canada for around $60.

    And I recognize that companies are entitled to make a profit, and that drug companies (sometimes) use those profits on R&D for new and better products.

    But we see instances of clear cash grabs. Sometimes they're due to circumstances (in this case, a generic alternative failed FDA approval, and a competitor left the market); other times a drug company will buy up competitors and consolidate the market (Turing Pharm).

    Why don't we have some sort of market cap of 3-4x or even 10x the cost of manufacturing a drug that is implemented after the R&D has been paid off? I get that companies would bend over backward to inflate that R&D figure, but sooner or later they would have to admit that it was paid for and need to settle into a mode of merely making reasonable profits instead of insane profits.

  • by tomohawk on 8/27/16, 1:35 PM

    It would be interesting to hear the other side of the story. So far, as in this piece, there is only the implied or stated theory that the price increases are due to greed, or just because they can.

    This whole thing reminds me of the flu vaccine debacle. The original narrative was that flu vaccines cost less in other countries, so why not in the US? Must be due to some greedy capitalists! The truth turned out to be a bit more nuanced.

    http://webcache.googleusercontent.com/search?q=cache:-08YyGE...

    It should surprise no one that these kinds of price problems occur in a system with heavy regulation, very little choice, and no transparency.