America’s pharmaceutical market is complex. More complex, in fact, than can fully be captured by one news article. Or 10. Or even 100. Last September, media outlets and Congress took Turing Pharmaceuticals’ young former CEO Martin Shkreli to task following a more than 5,000% price increase of his company’s antiparasitic drug Daraprim. Several months later, Shkreli’s name had mostly disappeared from the headlines, supplanted by an increasingly more provocative 2016 presidential primary race. Yet almost exactly one year later, a new story seems to be playing out much the same way. Only this time, the drug in question has been a long-time staple for delivering life-saving doses of epinephrine shots: The EpiPen.
Mylan, the company that has reportedly owned the rights to market and distribute the device since 2007, has now taken center stage in what is seemingly America’s healthcare morality play. This is due to Mylan’s incremental hiking of the EpiPen’s purchase price following the company’s acquisition of Merck KGaA’s generic-drug assets. While Shkreli and Mylan CEO Heather Bresch appear to each be cut from noticeably different cloths, and indeed the EpiPen increase comes off as much more tame in comparison, the rising cost of pharmaceuticals in the U.S. is more convoluted an issue than a simple battle between evil corporations and needy patients. Unfortunately, that is the way most media outlets commonly sell it. After all, it makes for good reading. It compels the audience to take a side. But in framing the discussion this way, either implicitly or explicitly, media outlets choosing to overly simplify the issue ultimately run the danger of watering down a troublesome trend more motley than a mere right versus wrong.
A Bigger Story to Tell
It's easy to drum up anger at companies like Mylan when one reads headlines this one from Business Insider:
“Here's why it's ridiculously tempting for the CEO of Mylan to keep hiking the EpiPen price”
In the article, writer Lanett Lopez draws a conclusion that is as tantalizing as it is common: Because Bresch stands to profit big time from continuing price increases of EpiPen, those prices aren't going to be going down any time soon. An assumption to be sure, but fair enough. Yet there were many factors that influenced the EpiPen’s relatively low price at the time Mylan purchased Merck’s generics assets. This includes a 1998 recall on the device that forced the holding company, Meridian Medical Technologies, to take a huge hit to its stock value. Meridian was later acquired by King Pharmaceuticals, Inc. in 2002, which itself was acquired by Pfizer in 2011. The sudden media attention on Mylan, Bresch and the EpiPen, despite the rise in price having occurred, not suddenly, but over a 12-year period, seems to have more to do with what the EpiPen does than what it cost this year as opposed to 2 or 3 years ago. And much of the anger undoubtedly exists because of how many parents and children rely on the safety and ease the device provides. Even still, to many, the price increase appears to be just another example of corporations lining their pockets thanks to the ongoing suffering of mankind.
Interestingly, Mylan’s relationship with Meridian and the EpiPen appears to go back further than most media outlets are reporting. In researching, we discovered not only a press release from Meridian detailing an agreement with Mylan dated April 8, 1997, but an SEC document stating that Mylan and Meridian had already entered into an “alliance formed in 1997...under which Meridian will license, develop and manufacture a line of generic injectable drugs to be marketed by Mylan.” As far as we can tell, no other media outlets have identified the fact that Mylan’s connection to the product has been much longer than from 2007 onwards. Or the fact that, during that time, the price of the EpiPen did not skyrocket.
Still, in defense of the decade-long price hikes, Bresch explained to the New York Times, “I am running a business… I am a for-profit business. I am not hiding from that.” Indeed, Bresch and Mylan have hidden nothing. It is not as if the price hikes happened overnight or in secret. And while her words are unlikely to assuage the frustrations of many calling the issue by another name -- corporate greed -- Bresch gave an explanation to CNBC that provides one of the clearest pictures yet as to why most specialty pharmaceuticals, not just EpiPens, have risen dramatically in price: