Capitalism

EpiPen Not Overpriced, Despite New York Times Complaint

Contrary to what The New York Times claims, the outcry over EpiPen prices has made them lower.

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"Outcry Over EpiPen Prices Hasn't Made Them Lower," is the misleading headline over Charles Duhigg's "Adventures in Capitalism" column in The New York Times business section. Duhigg writes, "I was surprised when my pharmacist informed me, months after those floggings and apologies had faded from the headlines, that I would still need to pay $609 for a box of two EpiPens."

That's the third paragraph of the story.

Twenty-six paragraphs later, way down toward the very end of the article, Duhigg discloses, "In fact, the company says that since it came under attack in August, nearly 90 percent of EpiPen buyers have paid less than $100 per box because of insurance, discounts or coupons."

So it sure looks as if, contrary to the headline, the outcry over EpiPen prices has made them lower.

I know something about this because I happen to have a family member who needs one of these things. This year, I was the one who went to the pharmacy to have the prescription filled. The price I paid out of pocket was less than it has been in years past and indeed, was less than $100 for the box of two.

So, at least in my personal experience, the Times headline is inaccurate.

An interesting question that the Times totally avoids is why Duhigg's health insurance is such that he has to pay $609 instead of the less than $100 that I paid.

Maybe he is rich enough—he speaks for companies like Bloomberg, Fairmont Hotels, and American Express via the Harry Walker Agency, and his book "The Power of Habit" spent "over 168 weeks" on The New York Times bestseller list—that he goes without health insurance, or has chosen a plan with a very high deductible, figuring he can effectively self-insure for all but catastrophic costs. Maybe he gets his health insurance from the New York Times Company, and that company is under such financial duress, or so poorly managed, that it provides even star New York Times employees such as Duhigg with worse health coverage for prescription medicine than the insurance I purchase myself for my family. Maybe it was early in the calendar year, and Duhigg hadn't yet met his deductible for this sort of thing.

Duhigg's column is 2,000 words long, but it somehow manages to avoid all of those questions.

Duhigg does attack EpiPen manufacturer Mylan, asserting that the company "flouts the norms of good corporate behavior." He complains that the EpiPen costs "so much," and calls for investors to oust the company's board.

Yet consider that for $609, or, for about 90% of people, less than $100 out of pocket, the company is offering a year's worth of access to potentially life-saving medicine, in a reliable delivery system. Compare that to the pricing of The New York Times: $1,014 for a yearlong seven-day-a-week home delivery subscription to a newspaper that, rather than saving your life, might inflict life-shortening stress.

Times defenders might argue that very few people actually pay the full $1014 annual rate. Most people pay less because they buy online-only subscriptions, or get it through work or at the library, or have student or faculty discounts, or get cheaper introductory rates. That's like Mylan arguing that most people pay less than $100 rather than the full $609.

I'm looking forward to the Charles Duhigg column complaining that The New York Times subscription pricing structure "flouts the norms of good corporate behavior," and calling for investors to replace members of the Times Company board of directors. But I suspect I'll be waiting a long time for that one. At the very least, a follow-up column explaining why the price he paid for the EpiPen is so much higher than what nearly 90 percent of other buyers paid would be in order. Otherwise, the "adventure in capitalism" here involves the Times itself ripping readers off for journalism that inaccurately portrays another company as rapacious.

Next time around, rather than joining the pile-on against Mylan, maybe the Times might consider exposing its readers to some unconventional thinking. At least one prominent health care industry consultant, David Williams, argues that even at $600, the EpiPen is underpriced. If the item were priced even higher, it would create more incentives for competitors to enter the market with alternatives. Competition, after all, is a good thing for customers, whether in the pharmaceutical business or the journalism business.

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57 responses to “EpiPen Not Overpriced, Despite New York Times Complaint

  1. EpiPen, Schmeppippen, machs nix… I was the first to post! THAT is whut matters!

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  2. So it sure looks as if, contrary to the headline, the outcry over EpiPen prices has made them lower.

    That isn’t what nearly 90 percent of EpiPen buyers have paid less than $100 per box because of insurance, discounts or coupons says, right?

    Not to trash the article or manufacturers but because of insurance and the big thumb of FedGov, we can’t know the answer from the minimal information provided, right?

  3. An EpiPen is $1 of drug in a $600 FDA-mandated delivery device

      1. That needs to be replaced every year even though you didn’t use it. School policy you know.

  4. RE: EpiPen Not Overpriced, Despite Times Complaint: New at Reason

    The market will determine if this pen is overpriced or not.

    1. not when you have the FDA

      1. Right you are.
        We must all allow our obvious betters in the FDA determine what a fair prices is because we’re all so stupid and don’t know what is good for us.
        Just look how the FCC looked after all us little people when it came to selling and marketing the cell phone.

      2. You asked for a miracle, I give you the F.D.A.

        1. Way to go Hans.

  5. The price people pay out of pocket is one issue, but it’s still a problem when anyone (even an insurance company) is paying exorbitant prices created by market distortions.

    1. Exactly. Monopoly power spreads costs to everyone via higher premiums.

  6. Yet consider that for $609, or, for about 90% of people, less than $100 out of pocket, the company is offering a year’s worth of access to potentially life-saving medicine, in a reliable delivery system. Compare that to the pricing of The New York Times: $1,014 for a yearlong seven-day-a-week home delivery subscription to a newspaper that, rather than saving your life, might inflict life-shortening stress.

    Spectacular.

  7. This article is so slipshod that one learns very little from it.

    “Too high” is a very relative term. It’s not too high if the market will bear it.

    Why does the market bear it? To know that we need to know a lot of other things that Stoll doesn’t bother to address:

    What’s the status of Mylan’s patent? How long have they had it? When does it expire? What is the fate of competitors patents? How many have their been? Why were they denied? Were the denials legitimate? I’m not a medical device developer, but it doesn’t seem to me that an automatic injector system would be all that difficult to engineer independently, unless Mylan’s patent is so broad that it makes it nearly impossible to engineer a similar product. But we won’t find that out from this article.

    Also, why are Epipens necessary? Why can’t consumers have a bottle of solution and standard syringes for a fraction of the cost? As a ranch owner I have many bottles of vaccines, anti-biotics, anti-inflammatories, etc. that I inject manually. Is there a reason someone can’t keep a 3 ml (or whatever size is appropriate) syringe of epinephrine in the refrigerator and jab it into their arm or leg when necessary?

    What is the arrangement that goes on with Stoll’s insurance? Is Mylan still collecting the full $600 and his insurance has jacked up his (and everyone’s) monthly premiums so that Stoll’ can feel good about getting his Epipen “cheap?”

    Some actual research would have improved this article greatly.

    1. Some actual research would have improved this article greatly.

      Agreed. Otherwise, it very much comes across as just Charles Duhigg saying, “I payed $600, I paid too much.” and Ira Stoll saying, “I only paid $100, I don’t know what you’re talking about.”

      Being a father, I can only assume the rebuttals go along the lines of uh-huh/nuh-uh followed by Set Theory contorting levels of doo-doo headedness.

      1. “I payed $600, I paid too much.” and Ira Stoll saying, “I only paid $100, I don’t know what you’re talking about.”

        The Stossel School of journalism.

        1. I don’t really see the difference between data and a collection of anecdotes (I guess it depends on how you define/collect said anecdotes, but I don’t think that word positively or necessarily means sloppily collected), but I think we can all agree that one anecdote isn’t data.

          1. No, one anecdote is a datum.

    2. An epi pen needs to work while under duress or while in the hands of a bystander.

      Apparently this is difficult to design which is why competitors have withdrawn from the market.

      1. Nope. No one else makes it because the FDA kept blocking applications. The CEO of the company is the daughter of a US senator from West Virginia.

    3. Epipens or auto injectors are more important for young children going into anaphylactic shock when parents or other adults might panic and not inject the proper dosage, as precise dosage is more important in a small body. The drug epinephrine is dirt cheap, worth pennies in most other counties. The patent is on the auto injector, not epinephrine.

      Sanofi had a competitive auto injector, Auvi Q, but it was pulled from the market because the device was not functioning properly (was not giving consistent doses with each click) and that is when Mylan got greedy and decided to jack up the price after seeing how successful Turing pharma was.

      Dey pharma used to sell Epipen before Mylan bought them, and Epipen was first approved in 1987, so there is no reason any company should have patent extensions lasting for 30 years. 12 years is more than enough for any pharma company to recoup their R&D costs and then some. All of the drug and device companies now try to make some small tweak just so that they can get a patent extension and monopolize the market.

      I’m a former pharma and device rep that hates socialism or redistribution of wealth, but also realizes that you can’t have a mixed economy with corporatism/cronyism. Free markets and completely overhauling the FDA and the patent process are overdue and greatly needed.

  8. Life is priceless so yeah, I suppose $600 to save your life is a good deal. This article is bad. It is designed to just defend ideology and slam the liberal NY Times. I get it, discounts, coupons, and what not make the average price cheaper than $600. I suppose if I am dating by cousin Marla’s friend Tina I can score a dime bag from her dealer Bruce for a nickel and so all that talk of Bruce having high prices is just a bogus argument. Come on Reason. Y’all know that pharma is playing a shell game with its price models in order to create asymmetry in information. For worshippers of the free market you ought to be a little disturbed by what they are doing.

    1. “This article is bad. It is designed to just defend ideology and slam the liberal NY Times.”

      Yeah, reality and truth are really bad to proggies.

    2. For worshippers of the free market you ought to be a little disturbed by what they are doing.

      The “free market” where the FDA has denied at least 5 different potential competitors?

  9. The price of a thing is the total amount paid for the thing.

    That includes insurance, taxes, discounts, refund deposits, mandated training before purchase, whatever.
    And that means the pen costs more than $100.00.
    On the other hand, as I picked up one of my wife’s prescriptions, and the ‘co-pay’ was $100.00, the pharmacist commented it was an expensive drug.
    I responded “It is cheaper than a funeral”.
    So what is an epipen worth to you?

    BTW, The New York Times is, to me, worthless.

  10. Ah, that sweet taste of irony when people are thankful that insurance covers all/most of their medical expenses and then turn around and complain how expensive insurance is. It’s almost like insurance companies aren’t bottomless pits of money but rather businesses passing along costs of providing a service to their customers.

  11. The problem seems to be market transparency. You can pay 600 or 100. Which is the real price? Insurance covers up certain pricing issues wonderfully. Our writer’s insurance company may be paying 600 and he is not. The NYT guy may be getting ripped off.

    A quick search at goodrx in my area says 125 to 375 for 2(cash). There might be lower online suppliers. Depends on how fast I need it though.

    Transparency is a serious medical care issue. It allows for the kind of incredible price disparities of the article and even in my search. Try that with a can of oil for your car. Same brand, same blend. Not so much.

  12. The problem is crony capitalism and the government being involved in medicine.

  13. Dump the FDA mandated monopoly, and provide emergency epinephrine over the counter. Problem solved.

    Most airplane crashes are caused by gravity, but this one was caused by the ground.


  14. “At least one prominent health care industry consultant, David Williams, argues that even at $600, the EpiPen is underpriced. If the item were priced even higher, it would create more incentives for competitors to enter the market with alternatives. Competition, after all, is a good thing for customers, whether in the pharmaceutical business or the journalism business.”

    Ok, this bit at the end is horse shit. An EpiPen costs maybe a dollar or two tops to manufacture. That’s a fact, because the drug in it is abundant and simple to refine, especially at scale, and the delivery device is also incredibly simple. I believe the cost is close to $0.42 each last I checked.

    The reason it’s expensive as hell, and the reason it’s so subsidized, is because of the Government. Literally, that’s the reason. Mylan has a cozy relationship through their CEO (former CEO? Not even sure) to a Senator (her father) and they have lobbied Washington to stymy any competition in this market with great success and that is the problem. Why do you think they are the only company making this drug/delivery device combo in the United States? Even at $100 this products market is distorted beyond reason.

    You hit the nail on the head, but you were using a pipe-wrench. Savvy?

  15. If people could use a syringe a dose of Epi in a vial is only about $2.00

  16. What a load. The price is the price. If you use insurance to pay for it, you’re still paying the price. You just paid some ahead of time and some at the point of purchase.

    Just because your co-pay was $100 doesn’t mean the price is $100. Your insurance paid the other $509 and you paid them the $509 as part of your premium.

    1. Well, YOU might not have paid the full price. Other people in your insurance pool could well have subsidized you.

  17. Mylan is trying to put a value on the Epi-pen’s ability to save a life. But in the USA, and in Canada, it is constitutionally mandated people have a right to life – and therefore, it is not acceptable to inflate a price to a person for the sentiment of enabling their life. Also, I think people will agree in general that it is immoral to hold a person’s own life ransom from themselves.

    1. For starters, no. There is no constitutional right to life in the US. Second off, what you decide is acceptable has no bearing on how EpiPens are priced other than your own choice to buy them or not. Third, food is far more important to continued human life than EpiPens. How is it that food is so cheap that obesity is a problem of the poor without the government fixing the price of big macs? Is McDonalds just an altruistic servant of impoverished huamnity’s need for sustenance?

      1. > There is no constitutional right to life in the US.

        Unless you are a forced-birther proponent and in that case the right-to-life only applies to fetuses, not people post-birth. (Tangent)

      2. The Constitution, specifically, does not try to define all possible rights (thus the ninth amendment). Instead it provides a definitive list of the federal government’s powers.

        However, in this case, there is a specific Constitutional right to life, in the fifth amendment: “No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

        Then, again, in the 14th amendment: “nor shall any State deprive any person of life, liberty, or property, without due process of law”

        While the Declaration of Independence is not law, I think its statement about the purpose of government and that people “endowed by their creator with certain unalienable rights, among them life, liberty, and the pursuit of happiness” provides context around the type of system the founding fathers attempted to create.

        1. Note, I’m speaking of a negative right — right to not have your life taken from you by the government.

          Positive rights, such as the right to have the government actively work to preserve your life, provide you healthcare, etc., are not proper rights at all.

  18. Curiously, the more useful something is, the more likely grown adults are to cry for top men to make sure it’s priced like a useless item.

  19. Yet consider that for $609, or, for about 90% of people, less than $100 out of pocket, the company is offering a year’s worth of access to potentially life-saving medicine, in a reliable delivery system. Compare that to the pricing of The New York Times: $1,014 for a yearlong seven-day-a-week home delivery subscription to a newspaper that, rather than saving your life, might inflict life-shortening stress.

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  20. Times defenders might argue that very few people actually pay the full $1014 annual rate. Most people pay less because they buy online-only subscriptions, or get it through work or at the library, or have student or faculty discounts, or get cheaper introductory rates. That’s like Mylan arguing that most people pay less than $100 rather than the full $609. hotmail login

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  22. Life is priceless so yeah, I suppose $600 to save your life is a good deal. This article is bad. It is designed to just defend ideology and slam the liberal NY Times. I get it, discounts, coupons, and what not make the average price cheaper than $600. I suppose if I am dating by cousin Marla’s friend Tina I can score a dime bag from her dealer Bruce for a nickel and so all that talk of Bruce having high prices is just a bogus argument. Come on Reason. Y’all know that pharma is playing a shell game with its price models in order to create asymmetry in information. For worshippers of the free market you ought to be a little disturbed by what they are doing.

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  24. For a publication named ‘Reason,’ this article contains staggeringly faulty logic. Its premise is that because individuals don’t pay more for EpiPen, that their price has not increased. Insurance compaines pay the extra, and then pass it along to us (not because they’re greedy bastards, but because they can’t operate at a loss: even Medicare would have to pay the list price)
    Still also tiptoes around the argument that the price change is arbitrary and capricious.

  25. Being born in 1981, I grew up hearing about how in America we embrace capitalism, and that we were unified in that belief. I learned about how thanks to capitalism, any able bodied man or woman could attain wealth and prosperity even if starting with nothing if we relied on our individual unique talents. Time and time and time again, Americans that had nothing built fortunes despite starting impoverished, AND THIS FACT PROVES YOU DON’T HAVE A BETTER CHANCE IF YOU’RE WHITE AND “Priveliged” EVERY SINGLE WHITE PERSON THAT STARTS OFF ALREADY HAVING EVERYTHING HE/SHE NEEDS is in that position thanks to a past family member that built that prosperity STARTING WITH NOTHING. Bam, white privelage argument is no longer a valid excuse. (Boy that Bill Cosby sure is enjoying some white privilege isnt he?) Thanks to capitalism America achieved becoming the most powerful nation on Earth in under 2 centuries, which no other country could do with thousands of years of socialism or communism.

  26. The fact is the epi pen used to cost around 90 usd. and now there are people who cannot afford it and have died as a direct consequence of this.

    and the most outrageous thing of all is that epi pens just costs 8.02$ to produce.

    Source:

    http://www.mercurynews.com/201…..-about-10/

  27. Just because some people have discounts, coupons, or insurance plans that cover most of the cost DOES NOT mean that the price of a box of EpiPens has gone down. The price is whatever the manufacturer sets it at, not what is necessarily paid for out of pocket. This means that the New York Times was technically correct in saying prices haven’t gone down. If I give you money for gas as a gift (so not a loan) I haven’t magically reduced gas prices, I’ve just given you the means to purchase gas THIS TIME. However, if my aid suddenly vanishes due to some contractual loophole (such as the ones that health insurance companies seem to be bloodhounds for) allowing me to save money at your expense, then the EpiPen manufacturer is still going to need the full $609 before you can receive your potentially life saving medicine. In any case, the moral of the story is that just because you and maybe many others can pay lower out-of-pocket prices than other people does not mean the price is lower, it means you are lucky to have access to financial aid. The issue is that the msnufacturers should not be asking ANYONE for that much money for EpiPens, regardless of whether that person has coupons/discounts/insurance or not. If someone is born with a life threatening allergy it isn’t their fault, nor can they fix this, so why should they have to pay even $10 for this thing that they may need to continue living and that they had no choice other than to purchase one?

  28. An epi pen needs to work while under duress or while in the hands of a bystander. Apparently this is difficult to design which is why competitors have withdrawn from the market. –Gmail

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