Prepare to Be Confused, Then Outraged, Then Confused Again

You may have heard some news about the exorbitant price increase for the Epipen, the ubiquitous life-saving anaphylaxis injection, and that the Heather Bresch-- the CEO of Mylan, the company that produces Epipen-- is the new Martin Shkreli, but the the issue is more complicated than a couple of greedy executives incentivised by stock prices and financial gains; if you really want to understand some of the context and the big picture, listen to the first third of Slate Money in their Worse Than Marxism edition, as they can explain it better than me; their point is this: sometimes markets and capitalism work worse than Marxism . . . markets are great for fungible items that aren't totally necessary and don't need to be on constant flow-- oranges, sneakers, houses, milk-- but crazy things happen when markets and regulation coexist (because the item or service is necessary for day to day infrastructure) so when you have electricity markets (Enron) or health care markets, where there is regulation, monopolies, the hurdle of the FDA, middlemen (pharmacy benefit managers) and no consumer transparency, and so in this instance, Mylan has increased the price of an Epipen from 100 dollars in 2007 to over 600 dollars today AND they did an incredible job marketing the need for the product (which remains mainly unchanged) so that dental offices and schools and Disneyland are required to have these things, generally in first aid kits-- which rarely get used, as most people who need an Epipen carry one-- and so most of these Epipens will gather dust and expire in a year (do they really?) and so you've got to replace them all and while, of course, we should try to have Epipens in as many places as possible, we should have them in as many places as is reasonably possible-- without incurring insane expenses (and I recognize this is cold utilitarian morality in the face of peanut and bee sting deaths, and so I'll let Louie CK do his thing . . . I put it up top, go 40 seconds in) while Heather Dresch is saying the system is broken, deductibles are too high, and we never wanted consumers to pay full price for these items, and then she's offering a 300 hundred dollar rebate card to consumers, this means that the health care system is going to foot that bill, and unless a big story breaks like this, most of the time-- because of opacity, collusion, and the inability for our government to negotiate and regulate prices on drugs-- we'll be unwittingly paying for all this because we never know what anything costs . . . and Heather Bresch, in her CNBC interview, blames the system for the price and she does offer a silver lining-- which is probably specious-- is that Americans are subsidizing drug prices for the rest of the world . . . because you can get an Epipen in Europe and Canada for less than 100 dollars-- the problem with this logic is that there hasn't been many blockbuster drugs developed recently, as big pharma has been more interested in researching older very specific drugs that have no generic, improving them slightly, and then jacking the price way up and marketing these drugs effectively, and so getting Epipens into restaurants, hotels, etcetera and we will again unknowingly foot the bill in increased deductibles and health care costs . . . so Heather Bresch has shown she can be just as big an asshole as one of the guys, but she's a product of the system . . . in Australia, Europe and Canada, health care is treated like water and electricity and there are bureaucratic means to set prices so that the services flow steadily . . . markets and capitalism work well in some instances, but without the right regulations they can also produce things like the institution of slavery (supply and demand . . . Europe needed sugar!) and the stock market crash of 1929 . . . near the end of the interview Bresch finally says, "I'm running a business" and she's right, that's what health care is in America, and--like education-- it probably shouldn't be.


zman said...

If pharmaceuticals should be utilities like water or electricity, who pays for the research? The government, using our taxes? So don't we end up paying for it anyway? How much pharmaceutical innovation comes out of Canada and Australia?

Dave said...

the government, universities, etc. at least then we have some control over pricing when there's a monopoly on a necessary drug or a backlogged drug. and there certainly should be financial "prizes" for extraordinarily useful drugs.

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