One of the early on-line responses was "maybe we can figure out how to 3D print these cases". It turns out that an Epi-pen is just a plastic safety housing around a normal syringe.
That second discussion got heated quite fast. I agree with the downvoters though. 3D printing a medical device is not something to take lightly.
Edit:
Here's why I agree.
You download this design from the internet, and 3D print the parts. You then assemble it. Awesome!
Some time later, you get an allergic reaction. You use the pen, but it fails to work correctly. Who's responsible? The designer? You (if you're alive)? The printer manufacturer? Your friend who emailed you the design? etc.
There's a reason why even getting such a simple design considered for FDA approval and certified for use on live humans is such a long and complex process. It's easy to make something that works some of the time, but it's extremely hard to make it work essentially every time, especially in life-or-death scenarios.
Of course, the price hike is terrible and the company behind it deserves punishment, but that doesn't make it OK to endanger the lives of people.
Scarcity demands innovation. I don't think its being taken lightly; more like, "a private company is gouging medical users and the government won't step in". Not left with many options when your life depends on it.
EDIT: Alternatively, a "better" temporary solution would be to arrange for the import of these from Canada, where the price is fixed by the government.
It's not merely size. It's size-relative-to-market.
Canada negotiates with drugs suppliers. Supplier says "take a hike". Canada says, "OK, you're out of the market", turns to next drug supplier.
Canada here has right-of-refusal, and can negotiate, as a single block entity, with ability to restrict market, to each. The drugs company which finds those terms acceptable has a market.
A bloc of 42 million in the US is only about 12% of the total market. The discussion there still leaves another 290M possible customers for a drugs vendor. Hence the strength is with the vendors.
If US Medicare had rights to exclusively negotiate drugs deals (it doesn't), this would change tremendously. Similarly for single payor.
Which is precisely why the entire medical services industry is so mortally opposed to it. They'd lose absolutely all market leverage. They know this.
The autoinjector provides value for people that don't do IM administration every day. It's rugged, sterile, can be used right through clothing if necessary, and provides the right amount of force to go through to the muscle. The kit might also include a practice injector for training the user.
Oh and it's probably a little hard to handle a bottle and syringe on yourself while you're suffocating.
That's an alternative, but is more complicated and the vials of epinephrine only have a shelf life of three months vice twelve to eighteen for the EpiPens.
That makes too much sence for the FDA, AMA lobby, big pharma, and very entity/persons that makes a killing off health care.
As to the simplicity the EpiPen, I once used it, and under stress didn't do it right.
When I was younger I was very interested in medicine. In college finished all pre-med courses. Interned at a Coroner's office, etc. Even spent some time in med school. Very familiar with giving a subdermal injection.
Now my father had a bad asthma attack years ago. I knew he was in poor health, so my stress level was high. He blurted out where the EpiPen was kept. I got the device, didn't have time to read the instructions, and just stuck it in his thigh. I apparently pulled it out too quick--just wasn't thinking, and nervous. I pulled it out so quick, because I was scared, felt the device was foolproof, and felt weird hurting my father. We luckey had enother one around, and injected him longer this time. If I was forced to use a syringe, their would be no assuming. "I need to get the drug into the syring. I then need to empty the syring into his thigh. Done?"
Well it didn't work, and he ended up in the emergency room. He survived.
I drove home feeling guilty, and still do today.
I always felt a kit with a single dosed bottles of epinephrine, and a syringe would make intuitive sence to a lot of people? I know I would have felt more comfortable that night.
I honestly think the powers at be underestimate the abilities of the average person, especially a person who's had an previous asthma attack. If a doctor/nurse spent a minute showing a patient how to injection themselfs with epinephrine; I don't think most would ever forget. Plus--we have all watched injections given on the boob tube? "But the average person would probally jab the syringe in the Carotid artery, or pull a Pulp fiction." They could jam it into a carotid, even with a EpiPen--with enough effort/stupidity?
I hope in the future we have over the counter life saving medications over the counter, including naloxone.
Demand passing a basic test if worried about consumers hurting themselfs? Something like a CPR certification? If the patient can pass, they can buy cheap medications over the counter? They don't need fancy propriatiatry drug delivery gadgets in so many cases.
I really think the only way to bring down medicine costs will be to make many drugs OTC, and demand basic competency exams if worried about ineptitude? There will always be people out there that will find a way to abuse/overdose/screw up dosesages on medication. Let's just try it for a year? Especially with certain life saving drugs. How many diabetics die each year because they don't have a prescription for insulin, and couldn't get to a hospital?
I used to have so much respect for any sector of the health care; now I look at most of them with utter discontent.
Sure... but then there is the problem of the end user.
Is there 3D printer correctly calibrated? will miscalibration effect its end use? how can you test to make sure the printed design is working as intended?
Can the printed plastic withstand direct sunlight for days on end? Some printed plastics become brittle over time in sunlight (PLA for instance).
When the difference is $1 vs $600, I think a lot of people would be willing to take that risk, especially for something that is basically an unexpected expense; I doubt any allergic people are getting stung by bees on purpose.
Most people I know couldn't handle a sudden $600 expense
like a car repair without help from someone like their parents (I'm mid-20s living in JP).
> When the difference is $1 vs $600, I think a lot of people would be willing to take that risk, especially for something that is basically an unexpected expense; I doubt any allergic people are getting stung by bees on purpose.
What probabilities are you assigning to needing the printed epipen to survive, and to it functioning correctly, such that it's worth that risk?
I get where you're coming from. I guess my point was that to most people $600 might as well be $6,000 or $6,000,000, since that's not something they can afford on their own. At that point, the dollar version is (hopefully) better than nothing.
Dying because you can't afford a device you need is also not something to take lightly. It may not be a good idea, but blame should lie with the manufacturer for raising the price to such ridiculous levels.
Yes; this is why using the free market to set prices in health care is always such a troubling thing. People don't like the idea of putting a price on their health.
Please don't blame the free market for these high prices. This is a highly regulated medical device market with patent protections and insurance market complications.
The price hikes would immediately attract lower-cost competitors if this were truly a free market.
> The price hikes would immediately attract lower-cost competitors if this were truly a free market.
Any participants in a free market for a product with inelastic demand (e.g. something you need to stay alive) and non-trivial entry costs immediately implements price fixing in the absence of regulation.
When life-saving devices that require a significant supply chain to manufacture capture the bulk of consumer surplus from the majority of potential customers (and the poorest are left to die), the free market is working as intended, efficiently allocating resources to maximize profits.
The non-trivial entry costs are there because of regulations and the legal environment regarding liability.
You can view the high price as the free-market finding the intersection of supply and demand given the regulatory and legal constraints but that seems like a less than useful way of understanding 'free-market'.
> You can view the high price as the free-market finding the intersection of supply and demand given the regulatory and legal constraints but that seems like a less than useful way of understanding 'free-market'.
Stop using regulation as a stalking horse for your argument. Everything you need to know about the price of epi pens you can derive from inelastic demand (people don't want to die), and barriers to entry (copyrighted brand, network of doctors writing prescriptions, and yes, FDA approval so these things don't kill people).
The price is high because people will pay almost anything to not die. This drives the price point up to capture consumer surplus. It's easy to understand.
The Free Market isn't a magic bullet that will drive down these prices. For one simple reason. Rational actors don't compete on price. I'm going to repeat this, because so many people don't get it.
Rational actors don't compete on price. Rational actors will spend up to their expected monopoly profits to create a Nash Equilibrium where new entrants into a market will be unprofitable. The simplest way to do this is through dumping. (see "competition" in the generic drug market for example) Why doesn't this happen in every market? Regulation.
Maybe you don't like that in unregulated markets, people starve, are poisoned, are denied treatment, and worked like slaves. Because that's how you maximize profit, by minimizing your own costs by maximizing externalized costs. So you'll think anything to avoid that realization. Like blame 'regulation' for what's obviously rationally maximizing profits.
And if you want to know how exactly the 'free-market' for medical supplies would work without regulation, just look at the 1800s. Demand was still inelastic, so prices were high, quality was low (for obvious reasons), and competition was still stupid, because price fixing and dumping were still more profitable than competing on price.
Let me see if I can be a bit clearer. A market with high barriers to entry that are defined by regulations and legislative constraints is not a free market. It is a market, just not a free market.
Blaming high prices in this situation on a failure of the market mechanism is simply inaccurate. The high prices are a result of the constraints that prevent competition and the emergence of a free market.
I'm not sure what to say about your assertion that price isn't a component of a competitive market. Certainly competitors try to compete on 'value' of which price is a component among many others (ease of use, features, reputation, availability, etc.).
I don't know what you are defining as 'unregulated markets', but I'm not advocating for the removal of legal frameworks that prevent fraud, negligence, collusion, and so on.
I have a PhD in economics, and your claims about monopolies and competition aren't accurate.
Economic theory doesn't state that monopolies always arise, at least not under the circumstances you are describing. If you can buy your competitors, or make a legally binding contract to compete, the yes, monopolies are inevitable. And as you say, inelastic demand does make monopolies more likely, though your intuition that medical goods have inelastic demand may be wrong, e.g. see the RAND health care study where they randomly assign people insurance types, and find the high deductible group consume less healthcare even in emergency situations.
In the general situation, no theory guarantees that monopolies arise in the absence of regulation (apart from the above to cases which aren't the regulation you're discussing).
>Rational actors will spend up to their expected monopoly profits to create a Nash Equilibrium where new entrants into a market will be unprofitable.
In economics, anything that relies solely on Nash Equilibrium is doubtful. In most situations, Nash Equilbria are not unique, and therefore it's hard to say what will actually happen. If the Nash Equilibrium is unique, usually some stronger equilibrium concept applies like dominant strategy equilibrium.
In your case it would be more accurate to say that committing to drive out potential competitors can be a Nash Equilibrium for some parameters.
> Medical costs started angling up steeply in the 1960s with the advent of heavy regulation
Broadly, to a first approximation: Medical costs, real-estate, and education have increased in price to capture the consumer surplus created by the decline in food. clothing, and fuel costs.
> Isn't dumping competing on price?
Nope, dumping is used to drive new entrants out of a market. It also acts as a signal to prevent new market entrants.
If I sell 2 million widgets per year at a price of $10 over a cost of $1, after $4 million in capital costs, I can maintain a monopoly if I'm willing to drop my sale price to 50 cents every time someone enters my market, and I raise the price when they exit it.
This creates a Nash Equilibrium were no rational actor will spend $4 million to build a factory to compete with me.
> have increased in price to capture the consumer surplus
It is quite a remarkable coincidence that medical costs angled steeply upward immediately after heavy regulation and government involvement in it began.
> I can maintain a monopoly
It'll be pretty hard to swallow $1 million/year in losses to do so. You'd have to maintain those losses to beat back even a small competitor, who would have proportionally smaller losses. A small competitor would have the capability to ruin your business with a small investment on their part. I bet they could finance it by shorting your stock.
The US government has been heavily involved in regulating medicine since 1906. The only reason why "medical costs angled steeply upward immediately after heavy regulation and government involvement in it began" is because "heavy regulation" is a weasel-word; you could pick almost any point after 1900 or so and claim that's when it started in order to justify that argument. Take a look at the list of milestones here for example: http://www.fda.gov/AboutFDA/WhatWeDo/History/Milestones/ucm1...
The two seminal events in the 1960s are the FDA 1962 "effective" mandate, with subsequent sustained price spikes is well documented in Peltzman's "Regulation of Pharmaceutical Information".
The other one is the enactment of Medicare/Medicaid in 1966/1965. From the graphs I've seen, that corresponded with the knee in the curve.
> It is quite a remarkable coincidence that medical costs angled steeply upward immediately after heavy regulation and government involvement in it began.
Regulation didn't give people more money to spend on medicine. Offshoring jobs to China drive down prices of consumer goods to make more money available as a consumer surplus that could be captured by healthcare.
If the price of food increased, the price of housing, education, and medical care would decrease. Because the demand curve would change.
> A small competitor would have the capability to ruin your business with a small investment on their part. I bet they could finance it by shorting your stock.
That's a nice hypothetical that completely ignores all of financial theory AND history. If you ever start a company, let me know so I can short YOUR stock.
Why wouldn't it be captured by farmers? or carmakers?
> all of financial theory AND history
Can you give case history of a company that maintained a monopoly via periodic dumping to bankrupt any competitors? I'm not aware of one, and no, Standard Oil is not one (see the book "Titan" about it). I've read many econ/history books, and none them put forward your dumping theory. Do you have a book reading list?
> The non-trivial entry costs are there because of regulations and the legal environment regarding liability
I think that misplaces the cause. The requirement for safety and the high cost of failure is what creates those regulations and liabilities.
Theoretically, we could eliminate the regulations and liabilities and just let people die, but 1) that's a really bad idea, and 2) it would be excluding from the market mechanism (i.e., externalizing) the most important aspect of the product, its safety.
Suppose there were no regulations and no liability for manufacturers. Would you really trust your life or your kid's life to some unregulated clone of the EpiPen that may or may not actually work properly when needed, knowing that if it went wrong the manufacturer wouldn't even have to pay one cent of your medical bills and didn't have to worry about liability for screwing up? I suspect not.
You would if you literally didn't have $600 for the brand name version.
Maybe $600 is an amount that everyone can get with some sacrifice but there are other drugs/devices/procedures that cost $10,000s or more where people just have to go without because they're not allowed to take a chance on an unregulated alternative.
I can think of many products which are life-saving which are readily available from countless producers for relatively cheap. The difference here is just as gwright has pointed out and you have a corpus of regulation which makes this particular product more expensive and/or chokes out competition.
The only sectors of the economy where significant, lasting shortages occur are the ones most heavily regulated.
> The only sectors of the economy where significant, lasting shortages occur are the ones most heavily regulated.
So you're saying that Petroleum Exporting Countries would never say... create an Organization intended to increase the price of oil?
Or the DeBeers wouldn't collude with diamond producers to limit the availability of diamonds to increase the price?
Or that manufacturers and distributors of light bulbs, lysine, copper, cleaning powder, vitamins, glass, milk and machinery would never, ever engage in price fixing?
I want to live on your planet, where capitalism is so nice and perfect that companies rush to give away all their profit by competing the marginal cost down to zero without any of those pesky regulations.
> In the software business, with pretty much zero regulations, competition has run the price literally to $0 for broad swaths of products.
That's like saying that price competition is alive and well because banks will give you a free toaster when they charge fees to loan your money back to you.
But to address the specifics of the software industry, software is a complementary good.
I know many software companies with essentially a single product, which they give away. They make money selling service contracts, which enough customers buy to make it worthwhile.
The price is still $0 and there are still no regulations on it.
Most (all?) commercial products have complementary products. This is hardly unique to software. I seriously doubt the theory that medical products have no complementary sales.
> The only sectors of the economy where significant, lasting shortages occur are the ones most heavily regulated
That's not what economic theory (and practice) say, I'm pretty sure. For example, unregulated electrical, communication (including Internet service) and transportation markets have resulted in shortages in rural areas. Unregulated food and housing markets (and many other markets, including Internet service) result in shortages for poor people. Unregulated fishing creates shortages of fish - a 'tragedy of the commons'. Monopolies and oligopolies eliminate whole categories of products.
The free market is very good for some purposes, but it's not a benevolent God that finds solutions to all our problems. It's just a very useful tool in the toolkit.
I would first like to point out that in the context of this conversation the definition for shortage I am using is that there is a shortage of a good or service where it once was readily available. Sure I could, say, take a rocket ship, to mars and denounce the absence of internet connectivity, but that's not what I'm referring to here.
>unregulated electrical, communication (including Internet service) and transportation markets have resulted in shortages in rural areas
Again, according to my above definition this is a slightly different topic, but it seems highly dubious that a lack of regulation is what has resulted in shortages of internet service is some podunk town.
>Unregulated food and housing markets (and many other markets, including Internet service) result in shortages for poor people
The most significant factor limiting the availability of low cost housing is municipal regulation, not the absence of it. I'm not aware of any place in a developed nation which has a shortage of food. It seems what you are getting at is the options may not be affordable for some, but that is a different concept from a shortage. Furthermore, it is a bit of a stretch to refer to the food and housing markets as "unregulated". If there are any shortages in these markets it's certainly not due to a lack of regulation.
>Unregulated fishing creates shortages of fish - a 'tragedy of the commons'
I have commented on the idea of "tragedy of the commons" many times. It generally leads to quite a tangent in the conversation, but if you're truly interested I'd be happy to discuss why the problem does not lie with a lack of regulation.
>Monopolies and oligopolies eliminate whole categories of products.
A true, lasting monopoly is only possible through market regulation which strangles out competition. All the textbook examples of "monopolies" (Standard Oil) were not monopolies at all. In fact in the early days of electricity there was so much competition in the big cities that the big guys lobbied hard to get their monopoly privilege.
You make many claims in strong langauge, but that's not itself meaningful. They are at odds with what I learned from economists, and from what I believe is the very widely accepted consensus in the field (though I might have a few details wrong). Regulation is a normal, effective response to market failures, which sometimes result in shortages.
Of course, I'm not providing any citations myself!
Yes, but in other countries everyone gets the same access to health care and people don't die on the street because they can't afford a commodity like an epipen! Though you might die in a hospital bed because the government wont spend a million euros a week on medication that may or may not give you a year more to live.
Of course. This case is particularly interesting because the device/drug combo is so commonly needed. But you'll find many other stories of manufacturers hiking the price of drugs people need to live, and the resulting backlash. Look up Martin Shkreli for a couple of recent examples that got attention.
We also see drug shortages because the lone manufacturer temporarily or permanently stops manufacturing. For example, there's an ongoing injectable estrogen shortage because the manufacturer has an issue sourcing a key ingredient [0] [1]. (Thankfully, other forms and dosages are not impacted.)
Then why are they making hundreds of thousands of epipens? Sounds like they should make like 100 a year and auction those suckers off. Less material and capital to manufacture, same profits.
doubtful that an auction that would demand those profits would be 1) easy to facilitate 2) stable and predictable.
Also, the individual price per unit would rise to the point that there would be another competitor to the market.
My point is that you can't cry about government controlled health care, and high prices of "free-market" items at the same time.
So either we have a gene pool cleansing and accept that people die, or a controlling entity uses force to coerce the manufacturers to adopt practices that will make it available at "reasonable" prices to the populous.
The manufacturer is obligated to (1) obey the law, and (2) maximize profits for shareholders. If you have a problem with the current situation, blame the government/laws[1], not the company.
[1] Blame is justifiably attributed to the government whether you believe the fix is a freer market (to reduce the costs associated with bringing suitable competitors to market) or you believe regulation should prevent this from happening. Apart from the requirements codified into law, we should have no expectation of altruism by companies, especially when their existence is intrinsically related to profit-seeking motives.
(1) seems like a total cop-out to me. By that logic, you can blame everything on the government. Some guy murders his family in a fit of rage? Government should have done a better job preventing it.
Also, part of the point of this kind of outrage is to punish these companies for their behavior so that the evil choice is not the most profitable one.
If corporations don't have an obligation to maximize profits for shareholders, then you'd better try and take that argument to shareholders rather than believe someone's opinion piece on the matter.
I didn't say corporations are legally required to seek profits, but they do have profit-seeking obligations in most cases. Without investors' expectations of future profits, those companies wouldn't exist in the first place.
And last I checked, murder is illegal, so no, I can't expect the government to do anything beyond that (as long as that law is enforced).
There is no inherent obligation to maximize profits. Most companies have that as their goal because that's what their shareholders want. But then saying that the manufacturer is obligated to maximize profits is a really bizarre and rather disingenuous way of saying that the people who actually own the manufacturer prioritize profits over lives. They don't have to do that, they just do. There's no "obligation" anywhere in there, just people's preferences. Saying that companies are obligated to maximize profits is just a way of saying that it's OK for people to value money above all else, even the well-being of their fellow humans, as long as there's enough indirection in the process.
If not for laws and government-mandated standards, how would you go about making sure companies put the "correct" value on lives vs profits?
I can hope my neighbor is a decent human being and that he'll be a good neighbor when people around him are in need, but I personally won't blame him if he doesn't. Similarly, if he's being a nuisance - without breaking any laws - I still can't really expect him to stop (just because I value my peace more than he does) unless I do something to change the law. I can whine about it all day long and tell him it's "not OK", but if I don't do something to change the law (or move), then the only person I can really blame is myself. Blame is only useful so far as it actually has any "teeth" to improve the situation.
It comes down to this: we all want the world to be a better place. We can hope and expect everyone else to live up to our ideals (and complain when they don't), or just do our best to live that ideal ourselves. Anything serious enough to warrant restrictions or mandates on the behavior of others is probably within the realm of legislation.
Making a company's customers upset tends to have teeth. There's a reason companies spend money on PR instead of just keeping that money as additional profit, after all.
If your neighbor is being a nuisance, it may be more effective to gather up some of the other neighbors and all go over to the fellow and tell him to knock it off.
I don't have any actual solutions to propose here. Maybe it merits legislation, maybe it merits consumer action, maybe it's just an opportunity for some other business to create a competing product. I just don't like criticism of people trying to work around a life threatening problem without also acknowledging the source of the problem, and I especially don't like justifying bad corporate behavior on the mistaken principle that corporations must prioritize profits above all else.
Gathering a group of neighbors and telling him to knock it off doesn't have any teeth either, I'm afraid. He can still say "screw you, I'm not breaking any laws, so you can't do anything to stop me."
I do agree about upset customers having teeth. That's exactly how a free market operates. If they're upset enough, they'll stop buying the product and look for alternatives. Except there aren't any suitable alternatives to EpiPen on the market, and it's a potentially life-saving product, so those teeth don't have anything to bite in this case. I'm sure many, many other companies would love to seize that opportunity. So what's stopping them from competing? Answer: unnecessarily complex government regulation.
Or, if that approach doesn't resonate with your worldview, then go out and put pressure on the government to regulate the prices of things like EpiPen.
Either way, the answer lies in the government, not the corporation. The company hasn't broken any laws. We can wish they'd lower prices, but we might as well wish for pink unicorns. The answer for your neighbor is the same - you can't expect him to be reasonable just because you gave him a stern word.
Yes, your neighbor can just ignore you, but he usually won't. Social pressure tends to work. That's just as true of companies as it is for bad neighbors. If your argument is merely that it might not work, then we're completely in agreement.
You can try the social pressure route every time this happens (and if you haven't noticed, this seems to be a recurring issue in health care), but unfortunately that's going to take more effort in the long run with fewer results. Many companies - whether morally justified or not - just won't respond to social pressure.
Or, redirect those efforts into fixing the issue through legislation (either to open up the market to more competition, or to restrict price gouging). That's a battle you only have to win once, so in my opinion, it's a far more effective use of one's time.
But if you prefer to cry out that life isn't fair every time people do things that aren't illegal, that's entirely acceptable. I'm glad to see we still have the liberty to speak our minds, regardless of ideology.
How am I, an average citizen, supposed to fix this issue through legislation? Write to my representative? He'll just throw my letter on the pile, and our useless legislators will continue being useless.
The only way to get any legislative action on this is to get the electorate to care about it so that legislators get convinced that they need to act on this in order to keep their constituency returning to the polls and checking off their name.
And in order to do that, you need to talk about how problematic and reprehensible these moves are, so people actually care about it.
So really, both the social shaming and legislative approaches start out the same way. Unless you think you're talking to a dictator, your "stop whining and pass some laws" approach is nonsensical.
> The only way to get any legislative action on this is to get the electorate to care about it so that legislators get convinced that they need to act on this in order to keep their constituency returning to the polls and checking off their name.
> And in order to do that, you need to talk about how problematic and reprehensible these moves are, so people actually care about it.
It sounds like we're in agreement there. The only difference is, you've expressed an unrealistic expectation with regard to the effectiveness of social pressure directly aimed at the company involved. If history is any guide, we can only expect systemic improvement in this scenario through legislation and/or deregulation. Otherwise, you're merely treating symptoms of the problem, not the cause (and no, the cause isn't capitalism or profit-seeking companies as many may have you believe).
Now, if trying to fix problems in our country through the use of a system of rules and regulations (aka, laws) that has been established for that very purpose is nonsensical, then so be it. I suppose that view is indeed nonsensical in the context of today's prevailing social attitudes.
Fiduciary obligation is complicated and jacking up prices in the short term result in lower profit than keeping prices lower -- if this company wanted to keep the price of the product low, they could easily justify it by arguing that indiscriminately raising the price would invite government regulation and price control (or invite more competition), which would reduce profits in the long run.
Shareholders already know that companies don't have an obligation to maximize profits. Tim Cook among others has made this point forcefully fairly recently.
Shareholders make investment decisions based on their own opinions of which companies are most likely to generate the highest return over their preferred time span. That is not the same thing as believing in an obligation.
Company misbehaves, government nationalizes them. It's a perfectly valid approach often used in the US, which places the blame on the company not the government as it should be.
Sure, we mostly stopped doing this for various stupid reasons, but legally it's sill an option.
It's surprisingly frequent, though generally short lived.
Legal and profitable mob run businesses are taken over vs shut down then resold once the books are clean. During World War II, Washington seized dozens of companies including railroads, coal mines and, briefly, the Montgomery Ward department store chain.http://www.nytimes.com/2008/10/13/business/worldbusiness/13i... Banks are probably the most common but it can also happen in bankruptcy.
You misread the WWII example which was considered completely ok. In different war: "In 1952, President Harry Truman seized 88 steel mills across the country, asserting that unyielding owners were determined to provoke an industry-wide strike that would cripple the Korean War effort. That forced nationalization did not last long, since the Supreme Court ruled 6-2 the action an unconstitutional abuse of presidential power." (You might want to read it vs skim.)
Also of note, their are thousands of examples in history, this is just referencing a few hundred to make a point.
PS: It's also worth noting that the mob example was taking control not just ownership. These companies where money laundering for example so they needed to remove people from the payroll who did not work there.
Consider myself properly chided. Still, I don't think the case was "considered completely ok". From what I can tell from newspapers of the time, the case was dismissed when the governmental occupation ended.
Companies have those obligations, and others too. We all have many obligations, including to our communities/society. If most businesses didn't meet those other obligations for the last several hundred years, there would be no community, no market, no technology, and nobody rich enough to buy epipens. You'll notice that most companies are responsible members of their communities to some extent, but there are a few leaches of course who live off everyone else's contributions.
Thanks for this summary comment. This is backed in the literature by people who are systems / usability engineers:
tldr: Reliable design is HUGELY important. You can't just put these things together haphazardly.
"The fact that less than 50% of participants across all devices could follow the labeled instructions without committing a single error provides confirmation that the need for training on the use of epinephrine autoinjectors is still important...The user-centered device design may have a significant impact on correct epinephrine autoinjector use and patient preference."
In the study below, moms of kids with severe allergies were trained to use the EpiPen. Six weeks later in a simulated test, only about two out of five were able to successfully deliver a lifesaving dose of adrenaline.
Shouldn't the FDA require that manufacturers provide evidence that consumer medical devices can be used reliably for their intended purpose?
You're right. With some Googling, I learned that the FDA does indeed have a "Human Factors Pre-Market Review Process."[1]
But for EpiPen, it seems that the process didn't work, because 60% of consumers apparently can't use the device reliably. I hope that EpiPen is an anomaly, and not typical for FDA-approved lifesaving consumer medical devices.
They should allow reasonably safe products that are among the best available options.
So if people can use an Epipen more reliably than they can prepare an injection, allow it to be marketed. If someone with a history of anaphylaxis is better off with an Epipen than they are with no treatment at all, allow it to be marketed.
> You use the pen, but it fails to work correctly. Who's responsible?
You are responsible for making decisions for yourself. If you think a 3D printed pen is not safe, buy the more expensive one. Don't hedge every decision you make against who you'd be able to sue if it goes wrong.
I rather dislike the (frequently American) immediate viewpoint of assigning blame/responsibility in the case of a failure, and thus who can someone sue. This isn't an uncommon viewpoint at all, rather it seems to be the first that many go to.
Consider this: every time you get into a car, you are putting yourself into life-or-death scenarios that greatly depend on the class and quality of car you've chosen. The government enforces some minimum safety standards for any registered car on the road, but above that, you pay for safety - quite literally.
Does the government prevent the sale of cheaper, inferior cars just because higher-priced cars are substantially safer?
Why should medical devices be any different? If the barriers to entry (e.g., costs associated with FDA approval) were lower, then we'd absolutely have some inferior EpiPens on the market. But we'd also have a lot more options, and all of them (even the best) would be ridiculously cheap compared to what we're seeing now. Wouldn't that be better overall for people who might not be able to afford one at all in the current system?
> The government enforces some minimum safety standards
I think this understates the safety regulations for automobiles by quite a bit. Maybe there's an example of an industry which makes lightly regulated, dangerous products, but I don't think cars are it.
True - the government's automobile safety standards are far from trivial, but there's no denying that the difference in safety between the cheapest smart car on the road and the safest car on the road is huge. In a head-on collision between the two, there's absolutely no contest.
Asking why the government should allow an EpiPen competitor with a 0.1% higher failure rate is akin to asking why the government should allow people to purchase small, cheap cars.
As a road user (walker, cyclist, occasional runner) I consider small vehicles that are easy to see around and above far safer than heavy, bulky vehicles.
Cars aren't designed for the safety of anyone but their occupants, though.
> Cars aren't designed for the safety of anyone but their occupants, though.
This is not the case. Part of the reason that all new cars from large manufacturers are as bulky looking as they are is to conform with US pedestrian collision regulations.
While I applaud this initiative, I'd like to be able to buy a smaller, nimbler car and simply avoid hitting pedestrians.
> there's no denying that the difference in safety between the cheapest smart car on the road and the safest car on the road is huge. In a head-on collision between the two, there's absolutely no contest.
I don't think that's true. Certainly expensive cars have new safety features, but ...
I read a study of empirical data on what, in practice, made cars more survivable in accidents. It was awhile ago but here is my vague memory:
The data was hard to analyze - they were trying to untangle cause and effect from wrecks - but the conclusion was that the most important factor was the relative location of hard points: If their hard point (e.g., bumper) lines up with your soft spot (e.g., driver-side door/window), it's bad for you. That's something that doesn't depend on cost.
Otherwise, I would assume safety depends heavily on weight and structural integrity, and certainly some cheaper vehicles, such as pickup trucks, would be much safer by those measures than much more expensive sedans.
It also might depend on center of gravity, roll-over potential, breaking ability, etc.
I once read someone stating that "The safest car on the road is the one with a ten-inch razor-sharp metal spike fixed to the centre of the steering wheel.".
Yes, but that's mostly because the safest car is more like a suburban tank while the smart car is more like an urban mobility device. If there were no suburban tanks around, the smart car would instantly be much safer.
Firstly, the standards and regulations a manufacturer needs to meet to get even a single car on the road are staggering - probably comparable to FDA approval in complexity. Also, the testing of single components and complete vehicles is extremely comprehensive.
Secondly, there's a huge difference between the two cases that you're not considering: medical devices are designed to interact directly with the human body and alter it from within.
Even though there are cars with a 5-star safety rating, you can still get ones with a 4-star or even 3-star ratings. So I would say the answer to the original question "Does the government prevent you from buying less safe cars" is "No".
In both situations, the government sets a minimum permissible safety standard to sell the product. Medications and medical devices are allowed to kill/injure, but only to a point. Same with cars.
The Government doesn't forbid you, the consumer, from buying questionable cars. It's the manufacturer who is restricted by Government regarding what cars they can sell.
> The Government doesn't forbid you, the consumer, from buying questionable cars.
Yes, they do. There are special regulations around salvage vehicles. Most (all?) states require cars to pass inspection to be on the road. The FTC requires certain disclosures on used cars. WA won't let you sell a post-1964 car - even in a private sale - without seatbelts (http://apps.leg.wa.gov/rcw/default.aspx?cite=46.37.510). etc. etc. etc.
Well, if I can print 3 of them for 1/100th the price of a single one from said manufacturer, if the design is even adequate I'm probably still better off.
What doesn't seem to be represented in the discussion is that if you source and build your own epi pen, you might not have that initial discussion with your doctor and you certainly don't get any medical guidance leaflet with it.
Using an epi pen is a dangerous business and can cause considerable complications. It is absolutely not to be taken lightly and is literally for life-or-death situations. I fear that those making their own (or heaven forbid somebody else's) pen will not know this.
Source: my doctor when I bought my first epi pen (beekeeper).
Semi-yes, semi-no. The epi-pen case is specially made to try and get people to shoot it into themselves/other people correctly. They are super color coded and once triggered can't be untriggered
Other than that, they could be 3-d printed or whatever is cheapest by many providers
Consider also reliability: What if some 3D-printed part breaks? What if it sticks when it gets hot or cold, or after a few hot/cold cycles, or after some flexing in a pocket?
The first 90% of quality is easy ... Think of the difference between the quality needed for a mobile game app and the software that flies airplanes.
If they're significantly cheaper, carry 2 or 3. If you're at a 90% level, you will be almost assured of cheaply having one work, assuming the error/failures are random.
Yes, this is sub-optimal in a life or death situation, but it's a reasonable counter to unreasonably high EpiPen pricing. Moreover, if this becomes common practice or if it's even feared as plausible, it could help reduce EpiPen pricing.
I am allergic to bee stings, myself and, to be honest, I don't agree with you.
The best solution is the one you can actually carry with you – if you can't afford the EpiPen, this system would be far, far better than nothing.
Further, while anaphylaxis is a life threatening situation, it isn't a situation where, if recognized in a timely manner, 10 seconds more to pull out the second or even 3rd home-brew auto-injector would kill the patient.
Next, the widespread existence and feasibility of a home-brew option would itself exert significant pricing pressure on the original EpiPen thereby making it more affordable for everyone and thus less likely that I would even need to actually make one.
Lastly, I would, in fact, use the above hypothesized home-brew option for my kids or wife (if they were alergic), if we couldn't afford an EpiPen or as a way of making sure we always had one available.
As I argued, having multiple devices cheaply on hand makes failure of one an okay thing. If they have a 10% failure rate (which itself is a high failure rate even for this scenario), having 3 on hand would mean you'd have one-tenth of one percent odds of all three failing. Add a 4th and you get down to 0.01% – get the individual reliability down to 5% failure rate and 3 devices would give you 0.0125% odds of failure. Those are actually pretty good odds. Moreover, I'm not sure what the traditional EpiPen's reliability is, but I'd bet it's not that much better than a 0.000125 failure rate.
Liability isn't (shouldn't be) the first concern in health discussions. Presuming an individual cannot afford the $600 version, surely the chance that a printed version might work is purely an improvement in their situation.
On the other hand, it doesn't have to work 100% of the time to be viewed as a threat, economically. Make it widespread, make it reasonably effective and you will likely succeed in driving the price of the certified EpiPen.
Even at retail (i.e. just walk into pharmacy with your prescription and buy it like you'd buy a coffee) they are £50 per pen/£90 for two [1] ($66/$118 at today's USD-GBP rate)
The weird healthcare system in the US is one of the main reasons I've resisted calls to relocate there for work. Stories like this are just really off putting.
You know what's weird about this situation is that often I've been told by people here in the US that the price NHS and other single payer systems pay is only possible because we here in the US supposedly pay for it at the free market price. I don't believe that myself since it wouldn't make much sense to say that the prices would plummet to such a degree as to be unprofitable. But I do wonder how much of the price would be affected if every country in the world were under single payer systems. Would it be even marginally higher? Would it be possibly lower for all? I'm not sure. But I would love to see someone analyze this to see if this is statement I keep hearing is 100% bunk.
> we here in the US supposedly pay for it at the free market price
The free market price system does not work in American healthcare because we do not have a free market. Healthcare is one of the most heavily regulated industries and the third-party payment system means that consumers are divorced from the price mechanism.
As a consumer of epipens, I can assure you that we are not divorced from the price mechanism. We are talking about $300+ a unit for a dispenser (the drug itself costs pennies). The time needed for competition to manifest in the market will cause much suffering.
It is possible that both can be true. The price for medicine is cheaper because you have a single entity, the NHS, negotiating for a large group of people. On the the other hand, it is possible that we subsidize the development of new medicine to an extent. An epipen would otherwise exist regardless because it is a requirement for many people. More advanced medicine that requires a large capital investment for research and development could be another story.
You can be sure that Wellpoint has also negotiated a good rate on Epi-pens. This price-gouging affects people who don't have prescription drug coverage or those who are enrolled in HSA plans that force you to pay for the first few thousand dollars worth of prescriptions at retail prices. And there are a lot of people being funnelled into HSAs by their employers.
My children have a need for epipens. With our insurance, it is still prohibitively expensive. After hearing about the cost in GB, I'm considering making a trip to London to stock up
Their negotiating position is probably limited by the fact they can't say that they just won't buy it. NICE evaluates all treatments bought by the NHS for value for money. If it was too expensive they'd just not buy it. It's not like there are no alternatives.
Actually, the big problem in the US is that there are no alternatives. The last Mylan competitor making a similar product folded six months ago. If you want to blame anything about the US system for the current situation, blame the regulatory capture that is generic drug approval.
What does the NHS do about drugs that are sole source?
Insurance companies are consistently profitable, it's hard to look at that profit as anything other than a net drain. Especially when a public healthcare option was not included in the US specifically because these companies could not compete.
Looking at direct and indirect costs insurance adds ~20+% to healthcare spending. Remember insurance commercials for example are yet another cost.
Someone might reasonably wonder why a federal task force is required to investigate "price gouging" for an item that contains under $10 of materials and is not mechanically complex.
Why wouldn't an entrepreneur simply introduce a competing epi-pen design and bring it to market for $300 (for example) and undercut the price being charged by Mylan?
We're told to hate the Martin Shkrelis of the world, and to resend the Mylans, but the truth is that our system prevents price competition because it is designed to protect established firms. This is why many established firms and "industry leaders" strongly supported the affordable care act.
The government has created a moat for the current pen through regulation, particularly the extensive testing needed to bring it to market as a medical device whom people's lives depend on it delivering the right dosage with a low failure rate.
This creates something of a small granted monopoly.
It makes sense for the government to step in when something goes wrong.
There are lots of theoretical arguments for a freer market that may drain that moat and allow competitors to quickly react to gouging but the reality is that consumers don't have a great way to test things like epipens and a market trial and error approach seems a little barbaric.
> a market trial and error approach seems a little barbaric.
The average American earns less in a week than the cost of one epi pen. No, "nonfarm" statistics don't apply since people who work on farms still need epi pens.
> It makes sense for the government to step in when something goes wrong.
What has gone wrong in this case? The protected cronies of regulators are making a tidy profit after spending years cozying up, making political donations, and building a revolving door between industry and government.
In actuality, in this case everything has gone abundantly right for regulators and firms. The task force will likely warn them that they should have just been satisfied with $350 per pen to avoid the bad press.
Consumers value accurate information about drug safety, so there is abundant incentive for a wide variety of different groups to offer a list of safe drugs.
Since most Americans also interface with a private health insurance company and often private medical groups or hospitals, it's not just the individual who determines which safe list to trust.
For example:
Ronald's cardiologist might trust a safe list produced by a professional organization of cardiologists. Ronald's wife may be from the UK and trust the UK's trusted list. Ronald may be a customer of Aetna which may use its own list.
If Ronald is prescribed a particular drug, he can verify that it's listed on any lists he cares about. Perhaps he's recently gotten interested in Anti-Vaxer lore, and the drug is blacklisted by his group. He can go back to his doc and request another option. The same would happen if Aetna hasn't added the drug to its formulary (for whatever reason).
Ronald may also be cost conscious and may also have a safe list of highly economical drugs, and may ask his doctor about the implications of choosing a far less expensive option that was popular in the 1970s. This drug may have been removed from Aetna's list due to influence from the pharma industry, but Ronald and his doctor can look at the available information and make an informed decision.
With pharmaceuticals we're talking about a very simple blacklisting or whitelisting scheme. Most well-known drugs are quite well understood. The "important" area for making the white listing (or blacklisting) decision lies mostly with brand new drugs. It's silly to think that a single entity can somehow merge the interests of young and old and derive a safe period of time for a drug to stay off the market. It's also important to recognize the intense pressure on regulators not to pull a drug that has already been approved and whose side effects may be a bit worse than initially understood (such as Vioxx).
So in a broad sense, the key is decentralization, to make corruption more costly, and focusing our trust at the local level to the docs who we trust with our care who can make an informed decision guided by whitelist/blacklist offerings from a variety of sources.
Do we really expect every person to conduct such personal research for every single treatment to every single ailment they have? I don't consider that a reasonable solution.
It would be more of a checklist. Chances are there would not be much disagreement. Tylenol, for example, is likely to be whitelisted by nearly any list maker.
The scenarios where there was a mix of approval and disapproval probably do warrant taking some extra time, yet few of us are able to do it today because we assume (falsely) that just because something is approved by the FDA it is safe (or unsafe if not approved).
Effectiveness is a whole different question, and many drugs with significant side-effects do not do better than the placebo effect for some of their approved uses.
How would one vet which lists are "true" and which lists can be "sponsored"? What would prevent corps from taking their lobbying money and simply directing it at list makers? How would the non-sponsored lists make their money?
There is no market solution because it's not a market problem. If you try to make your own epi pen and sell it, the nice men with guns come and take you to jail. Literally.
Are there any cases of a small company attempting this? Since the drug is well known and cheap, I was hoping to read about hackers designing an open source 3D printed dispenser.
Thank you. This is a problem that starts and ends with government, not with the "free market" (which hasn't existed in the healthcare industry in a long time)
The problem is how does the free market test these kinds of things when there is every incentive to cut corners? We're not talking about toasters. How many people have to die before the market reacts? How much research into individual company's testing should a person do in order to buy an epipen?
Do you continue to patronize businesses that cut corners when you expect good customer service or a good product?
The free market ruthlessly punishes businesses that do not meet consumer demands. Only through government interference are substandard businesses sustained. Profits are the signal that a business is doing something right.
Ok, but the EpiPen is a life-or-death product. We must have coercive government regulation, right?
> How many people have to die
As far as a quick search could turn up, it looks like the discovery and isolation of epinephrine was entirely the product of private ingenuity -- in 1901. Government did not have some large project to find this wonder compound that could save lives. So private initiative already has saved countless lives without the direction of the government.
So here is a compound that has been around for 115 years, and somehow we're looking at $600 for a two-pack of injectors. There is no way that situation arises from free-market processes. Government has been heavily involved in healthcare for a while, granting monopoly privilege to favored parties, effectively eliminating competition.
Additionally, if a company sells a product purporting to save your life in a dire situation, shouldn't they be held liable if their product doesn't work? Not only will people cease to trust said company (forcing them out of business) but competitors will also arise -- and survive -- based on how well they serve consumers.
>The free market ruthlessly punishes businesses that do not meet consumer demands.
True. But only as ruthlessly as the market approaches the free market ideal (readily available and accurate information on products, other users, choice at time of purchase etc). And we know there are no true free markets and that markets can drift far from the ideal even absent of government interference.
Who is the first to try out a newly released epipen?
>Only through government interference are substandard businesses sustained.
Now THAT is a very strong statement. Information asymmetry that has nothing to do with government is one category of ways a sub-standard business can thrive. Are we to believe that information asymmetry is all rooted in government interference?
> Profits are the signal that a business is doing something right.
Most of the time. An abundance of sustained profits is also a signal that the business is doing something wrong (or taking advantage of a market failure of some kind) or competitors would be jumping in and eating away at them.
> markets can drift far from the ideal even absent of government interference
But only government interference can lock the market in that state in perpetuity, eliminating the corrective forces of price and competition.
> Are we to believe that information asymmetry is all rooted in government interference?
Of course not. But businesses that are able to satisfy more consumers through better transparency are going to win market share and increase profits.
Asymmetry exists in most business situations though. That's the whole point of specialization in the economy: some people have greater knowledge, skill, or training in a certain area and are able to provide more value to the consumer. It is worthwhile for the consumer to trade money in exchange for the specialized service rather than spending years to learn that craft to perform the service herself.
The cornerstone of the free market is satisfying consumer demand. Firms that fail to do so are destroyed quickly and effectively when the consumer stops purchasing their product.
> abundance of sustained profits is also a signal that the business is doing something wrong
>But only government interference can lock the market in that state in perpetuity, eliminating the corrective forces of price and competition.
Again a very strong statement with only faith that government is bad to back it up. Market power can become dominant in such a way that it can lock market distortions in as well. See: monopoly
>But businesses that are able to satisfy more consumers through better transparency are going to win market share and increase profits.
What about businesses that poison the environment in secret? This is also an information asymmetry that can exist that will earn greater profits right up until they are caught, if that day ever comes. I was using information asymmetry as one unavoidable aspect of pure markets that can lead to severe distortions completely apart from any kind of government interference since you asserted that only the government can sustain negative market distortions.
>> abundance of sustained profits is also a signal that the business is doing something wrong
>What? Please explain.
If there is a great profit being made in a theoretical market approaching perfection then theory says competitors will enter that market, chipping away at that enormous profit until it is at a level that is still profitable but only so much as it is not worth it to further competitors to enter that market to capture even more. In other words, in a well functioning market profits tend toward (but never reach) zero.
If this is true then an abundant profit sustained over time is an aberration and evidence that the business is doing something wrong in terms of the health of the market (threatening or buying off potential competitors, for example).
Please. Even in the classic case of Standard Oil, they lost massive amounts of market share even before the government started interfering in their business.
According to Wikipedia:
In 1904, Standard controlled 91 percent of production and
85 percent of final sales. [...] Due to competition from
other firms, their market share had gradually eroded to 70
percent by 1906 which was the year when the antitrust case
was filed against Standard, and down to 64 percent by 1911
when Standard was ordered broken up and at least 147 refining
companies were competing with Standard including Gulf, Texaco,
and Shell. It did not try to monopolize the exploration and
pumping of oil (its share in 1911 was 11 percent).
So when the "white knight" trust busters of government finally got their way, Standard was down to 64% market share. Hardly a monopoly at that point.
> What about businesses that poison the environment in secret?
If we had property in the air and water, then if business harms your property, you have recourse against them. As it stands, the air and water are unowned, which means that they are a permanent tragedy of the commons.
As to your ideas about perfect market competition, etc: real markets are dynamic and vibrant, with new technology disrupting old ways of doing business and new consumer preferences forcing business to adjust. That's fine if some theoretical market theory says in equilibrium, profits tend toward zero, but we live in the real world, so that will never be the case with free markets.
So, the free market where it fits your narrative of the evils of intervention and real markets where your free market narrative breaks down. If you follow your last real market argument a little further, you'll find my positions.
> Do you continue to patronize businesses that cut corners when you expect good customer service or a good product?
Do you have cable and/or phone service? Would we be using Comcast or AT&T if monopolies or regional monopolies didn't make them the only choices? Monopolies that were enabled through government inaction, by the way, not through government enabling. [1]
> The free market ruthlessly punishes businesses that do not meet consumer demands. Only through government interference are substandard businesses sustained. Profits are the signal that a business is doing something right.
There's always going to be the problem of information asymmetry. Most people don't have the time to read Consumer Reports, go through the research of what brands cut corners and which don't, and do the cost-benefit calculation of picking quality vs. price.
I don't think government interference is somehow propping up the fast food industry, or bad policies from Comcast.
The terrible state of internet service providers is not a free-market phenomenon. Those industries matured over a long period of time hand-in-hand with governments and regulators. Through bidding processes, licenses, and overt monopolies, government has heavily influenced the shape of those industries today. Taking a broken system and "deregulating" it doesn't magically get you awesome results, if the very fabric of that system was built on government privilege and control.
If government wants to take some action now that can undo what it has done in the past regarding the ISPs, then I'm all for it.
> There's always going to be the problem of information asymmetry.
Even if I grant you that point -- but see sibling comment -- wouldn't it be nice if that were the only problem in the market? Wouldn't it be nice if there were no government-granted monopolies? Uber vs the taxis is the perfect example of what's wrong with cronyism and government privilege.
> propping up the fast food industry
Consumers are propping it up, because it meets the need for cheap, tasty food. Sure it's bad for you, but people know that and don't care. Doing drugs is bad for you -- and illegal to boot -- and plenty of people use them. I don't prefer a government that dictates what sorts of things I put in my body of my own free will.
> The problem is how does the free market test these kinds of things when there is every incentive to cut corners?
The same incentive that makes the iPhone or Model S such poor quality?
We don't know the name of the epi pen manufacturer because it does not need to develop a brand reputation, all it needs to do is reach a deal with regulators and collect profits.
There is much room for a combination of public and self-interested private watchdog groups. There is no reason why we must rely on only one quality control approach.
If things go poorly it can simply sell the patent to another firm who can repeat the same strategy, the only risks being that someone will come up with a better treatment or that regulators will take a dislike to the company... The second of these risks can be reduce through revolving door strategies and the standard regimen of fancy meals, etc.
Our entire medical system was founded as a reaction against snake oil salesmen and quacks who preyed on desperate people. If you support capitalism and the free market in medicine, you must acknowledge that monopolies can and do arise.
First: I don't disagree with you about price gouging and the need for a solution. i spend time awake at night thinking about it.
Considering COGS in Biologics drugs pricing is a logical fallacy. The $10 is irrelevant. You have to amortize in all the time, and expenses required to establish a sterile fill and finish facility, or the required capacity of a new product in an existing facility. A reasonable accountant would also probably throw in some of expense for the patent lawyers generic firms have in legion, or R&D pharma has. Maintain a large amount of sterile injectable manufacturing capacity at "drop-of-the-hat" availability to absorb/profit from such market fluctions at low pricing? Not a business model anybody would fund, or would keep someone employed in pharma.
Does that justify the new price, probably not. Does it make a $300 pen a great business plan? Probably not.
Hopefully that changes as the parasitic business models of the Valeants and Skrelli's of the world are receive due scrutiny.
Your point about R&D is valid, but in this case epi was first synthesized in 1895 and the R&D cost has long since been amortized and the IP is in the public domain.
I agree it's a good business plan as a solo participant in the market, but as a second or third entrant, probably less so-- depending on IP around the formulation and delivery method.
With the number of company with discontinued products in the Orange book, i suspect there is some economic burden.
> i'm not sure why the price will stand in the long term.
I think the system we have leads to partial collusion, since all firms have an incentive to keep prices high and share the market two or three ways. If there were 30 or 40 pharma companies competing it would be a different story.
It's an alternative that a) requires a doctor to specifically prescribe and b) is not covered by most insurance plans. There is a good reason the articles on this subject are saying there are currently no alternatives, since there were drop-in replacements until earlier this year.
It's still obviously a reasonable substitute for (at least some) patients with out of pocket costs above $150 for Epipens.
I do understand that people are concerned about the different usage instructions (for example the school nurse not realizing it needs to be used differently) and that doctors may be hesitant to prescribe it.
The thing I think is really interesting about the $150 generic Adrenaclick is that it puts some sort of ceiling on the regulatory costs and costs imposed by the other players in the health system.
The Mylan CEO did an interview this morning where they hand waved and equivocated and so on, but it's clear enough (based on availability of a $150 substitute) that they are setting the price based on their advantageous position in the market. I don't see any reason not to call them out on any BS where they try to deny that.
If your kid is allergic and needs an EpiPen (or something like it), most school districts will not allow the child to attend class unless they have one at the school. Maybe two.
And of course you have to carry them. There's another two.
So that's $2400. Out of pocket if you don't have insurance, or if your insurance doesn't pay.
The EpiPen manufacturers are abusing their monopoly.
Given the proper age, teaching kids to use syringe/vials or having a school nurse that can administer epinephrine would be a much cheaper alternative.
EpiPens are purely about the delivery mechanism. Stabbing a syringe into your thigh and injecting a predetermined amount of epinephrine into your leg isn't majorly complicated.
Maybe having a single pen on the kid and vials/syringes at the school would be a cheaper option.
I don't think you've ever seen a child in Anaphylactic Shock if you think all you need to do is train the child to use a vial and needle. Even training school personnel is not a great idea - While an ER nurse or paramedic can handle it because they give injections every day, a teacher or even a school nurse may go for years without ever needing to do an epinephrine injection and the stress and inexperience may make them unable to perform under pressure of having a child dying in front of them.
An IM injection is easy to do when you're calm, but just filling the syringe can be difficult when you're under intense pressure.
I wonder why glucagon isn't done in the same format as EpiPens are. I'm a T1 diabetic and I have one glucagon vial at work and one at home. In the case I go low (barely responsive low) someone has to go grab it from the fridge (it needs to be there) load the syringe and use it on me.
When people sleep over I teach them how to use it and I do something like a show and tell at job from time to time so new people know about it.
It's not just 'load' the syringe. There's a liquid and a powder that has to be mixed. First, the liquid is injected into the powder. Remember to remove the protective cap from the vial and the two protective caps from the needle (apparently, people frequently forget the one on the vial and break the syringe). Then, mix by rolling, not shaking, for 30 seconds. Then, withdraw the mixture into the syringe and inject it.
Not only does it need to be kept refrigerated, the shelf-life isn't that long to begin with (about a year).
I'm also a T1D and there's a reason that, despite the various seizures I've had in my lifetime, I've never received Glucagon.
Cake icing squirted between your gum and cheek also works (although everything ends up sticky and blue by the end of it).
Edit: I didn't mean to sound like you didn't know what you were talking about, I just wanted to expand on what you were saying about 'show and tell'
I've never used an auto-injector on myself before. I have used expired auto-injectors on oranges and potatoes to make sure that I have a "real feel" for how the hypodermic needle really injects. The trainer injectors certainly don't teach you what that is like!
Having said that, I would vastly prefer an auto-injector compared to a syringe + vial. I'm not sure if I would have the proper composure/state of mine, let alone the visual acuity (eyelids swell up real bad during anaphylactic shock) needed to operate a syringe and vial during an episode of anaphylactic shock.
In more controlled situations like at a school nurse's office, where the patient isn't the administering the epinephrine to themselves, I can see the syringe and vial solution to be appropriate.
And that pharmacies will often try to give you EpiPens with an expiration date less than a year away, indirectly increasing the cost (since most districts will require unexpired pens, and refuse your child even if then pen is a day too old).
The adrenaclick generic is much cheaper than the epipen, with or without insurance. Although technically different epinephrine auto injectors cannot be substituted (you can only be prescribed the one written by your doctor, or its generic equivalent), practically speaking the only difference between the epipen and the adrenaclick design is the instructions for use. I would hope there isn't a case of doctors being unaware of the alternatives.
My doctor/pharmacy was apparently unaware of the differences or neglected to inform me. At some point in the last 4 years I started getting generic Adrenaclicks instead of EpiPens. The difference between EpiPens and generic Andrenaclicks was never presented to me as a different choice in medications, just an "expensive brand name" vs "cheap generic" choice. I wonder who screwed that one up.
I did notice the different usage directions (mainly two safety caps with the generic vs one for the EpiPen) but never thought that the FDA considered them to not be equivalents. At least I made sure to carefully read the administration instructions and have trained with dummy, training auto-injectors and expired, real auto-injectors!
It's your doctor's fault if you didn't get the substitute earlier. As adrenaclick and epipen are not actually equivalent (even though ultimately they deliver the same medicine, in the same dose, in the same manner), the pharmacist is not supposed to do anything but provide what was prescribed.
Thank you for mentioning adrenaclick. Generics have been completely missing from the public debate. While epipen price gouging is very real, and a problem, there is one short term solution for allergy sufferers: demand an Rx for the generic. They are under $200 (source: checkyourmeds.com). Vote with your wallet!!
Looks like the differences are: extra safety cap and Epipen brand has an auto-retracting needle.
Great business to be in, attach an auto injection mechanism to maybe $5 worth of syringe and epinephrine.
Then undercut your competition by over 60%. I hope they do well. If more generic manufacturers get in on this or the patent expires we might see this go down to a more reasonable <$50 price, but this is definitely a step in the right direction.
Unfortunately there is no generic for Epipen. Unless you have been written a prescription for Adrenaclick specifically, you can't get it, or the generic version.
Probably because that is not what matters. With the epipen, I can just jam it into my daughters thigh, straight through thick winter clothing and all. I don't need to ensure she gets the dosage right, nor that the syringe doesn't break.
EMTs are not the target customer of epipens. They work with life-threatening situations day after day. To a kindergarten teacher, if a child if having an anaphylactic chock, this is very far from a "very slight increase in complexity".
Just to ground the situation, the kindergarten teachers at my daughters place are already freaked out from the thought of having to administer an epipen. I can't even start to imagine how they would handle a syringe and a bottle.
There are thousands of people out there who carry IM Glucagon kits, an similarly time sensitive medication, intended to be administered by untrained bystanders. If it works for Glucagon, I see no reason it can't work for Epinephrine. In reality, there's no need for a vial, the syringe can be prefilled with the correct dose.
I mentioned in another comment when someone from Europe or Canada asked something to the effect of "how come everything has to be free market in US even healthcare and such".
And I think the answer is we treat free market as a religion. We don't evaluate what is better, healthier, more rational answer for a problem. Like say, "How do we keep people from dying from anaphylaxis?" We don't answer that. We always answer first, what would free market want? Will it want us to do this? If not, we don't proceed.
We treat it as if it is deity of sorts and if we disobey we'll be punished.
Someone replied and said this idea isn't so outrageous because a similar concept has been defined already in politics:
I am just proposing there is a similar religion in respect to free market.
It is often sold in propaganda terms of course -- we are not communists here, we just want efficiency, we want progress, don't worry stuff will trickle down eventually and so on. So we make it palatable but the main incentive is worshiping the deity.
It sounds crazy but evaluating a lot of things we do as a society through that perspective can be interesting.
That's silly. How do you propose to "evaluate what is better, healthier, more rational"? I suppose some panel of experts could give you their best approximation, but it will always be sub-optimal. Markets exist in order to answer these questions, and they answer them by delegating the decision to every person involved in the decision, not by hoping a designated person can make a guess that's close enough.
It appears that the problem in this case is that there is a single producer who is able to engage in monopolistic pricing, which is certainly not something a market-oriented person would condone.
And the market for healthcare is not a free market. Not anything resembling a free market.
> Markets exist in order to answer these questions,
Well in this case it answered that the price should be $600. This means people, kids, astamatics are going to die at some point in higher numbers because of that.
I say the market is drunk or evil and should not be allowed to make medical decisions.
But because it has a religious following, we don't want to make it angry so we can't say "we mandate EpiPen cost to be $25". Instead we dance around it and say "oh we'll create this health insurance thing, and then that will pay for it". But only if you work. Or ... if you don't you have to buy it anyway, or you have to pay a penalty. But unless you are old, then we kind a let you off the hook a bit and you sign up for this other thing. All of that is done in paper and in how it is presented to the public because we don't want to upset the free market gods.
Setting prices via administrative fiat doesn't eliminate problems. If the price is set to low, there will be shortages or no product at all. If the price is set to high, then the blame for the high price is shifted to the legislature rather than the supplier.
In any case, it is the government that is creating the conditions that allow the price to be set so high in this case. Blaming the 'market' for adjusting to the conditions created by government is confusing cause and effect.
"AHA! This flaw would prevent that from being a workable solution. Keep the status quo!"
As if (a) understanding that there is a problem necessarily means that one must understand the solution, or (b) as if we live in a vacuum and this hasn't been addressed by dozens of other nations.
It has been addressed. In a dozen different ways, with different pros and cons. I can't tell you if the British or German or Japanese method is better, but I can tell you that we're the only schmucks going bankrupt to avoid death by bee-sting.
Yes you can! Believe it or not this completely unregulated free market utopia exists. It is not just a fantasy. Now don't get excited, I imagine after I tell you about you it, you probably won't be headed to the airport to go there -- that's because it is actually horrible.
Unregulated market is what was (and is) happening in any of the post-Soviet republics, Russia, probably China, probably many other countries.
Those countries are better at free market than America. Yes on paper they have their EPAs, FCCs, FDA and other nuisances, but in practice nobody cares.
So you can buy some pills from the street corner shop that sells cigarettes. But chances are they are expired at best, made in a basement from chalk and sugar, or harmful at worst. Of course the claim is, "ah but market takes care of it, next time you won't buy from there and they'll go out of business". Nope, you might be dead next time and no they won't go out of business.
You can go and buy unregulated vegetables from the market. And they look fresh and plump and nice, but they are chock full of horrible chemicals in them. How do I know? My relatives there grow and sell them. They have a separate plot of land for such things and wouldn't let their kids or themselves eat from there.
Gun ownership there is restricted. Unless you are friends with the police. Then you can have a special permit for a gun. Oh but you have to pass a psych exam to make sure you are not crazy. But it so happens you are crazy. But, no worries, such regulations are bypassed with a quick $50 gift. And yes, I have seen them shoot their Dragunov sniper rifle, in a village, with houses right next to each other, and nobody cares.
The list goes on. Now maybe I assumed too much that you won't like it. Who knows, maybe you would. Well you are welcome to visit and try it out.
I'm sure there are some people that truly want the unfettered, caveat emptor world that you describe, but I think that is a mischaracterization of what most free-market advocates are actually talking about.
The type of regulations/laws are hugely important. Critical statements regarding existing regulations are not the same thing as advocating for no regulations whatsoever.
I think it is more useful to view calls for a 'free market' to really be calls for a 'minimally regulated market'. For example, regulations and laws that penalize fraud and negligence are well within the scope of a 'minimally regulated market'.
Perhaps because it actually costs more than $30 and so an edict such of this would guarantee that there are no EpiPens at all?
In any case, the current high price is the result of regulatory/legislative actions and so the current price is evidence of regulatory failure, not market failure.
I don't think it is a massive regulatory failure to have the pharmacy dispense a product with matching use instructions to the product that is prescribed.
So it's the market that has doctors prescribing $600 Epipens instead of the $150 alternative (that has different use instructions and thus cannot be used to fill a prescription for an Epipen).
Isn't this just another example of a problem created by the rules/regulations? A pharmacist is forbidden from providing the $150 alternative even if the customer specifically requests it (because of the prescription requirement and rules).
For those who need epinephrine injectors, can't they just ask their doctors to prescribe Adrenaclick? What prevents that from happening? I'm guessing it is insurance guidelines that are also stuck in the EpiPen-only world but perhaps it is also doctors being too conservative?
It's marketing. I saw some discussion on social media, people expressed a preference for the Epipen because they expected other people to be more aware of how to use it.
Same with parents, they expect the school nurse to be more familiar with the Epipen (and I guess the other way around, the nurses prefer Epipen because they are familiar with it).
If asking the pharmacist for a specific type of injector isn't onerous then neither is asking the doctor.
I'm willing to concede that US medical regulation has lots of problems, but there is also clearly some problems with the way people in this market are behaving. Patients should care about saving $1000-$1500. Doctors should care about saving their patients $1000-1500.
Well in a perverse sort of way, the $600 price tag is certainly one way to motivate patients to demand alternatives from their doctors and insurance companies.
If the cost is $5 why wouldn't someone manufacture it then?
> You can't just will things into existence with unrealistic feel good rhetoric.
Why not? We've willed wars and consequent huge handouts to the military industrial complex. I am sure if we tried a bit we can will into existance some $30 EpiPens.
You might be able to coerce (by force) the world to give you what you want at the price that you want. But that doesnt mean it comes without a price. There is always a cost and many times, with governmental interference much of it is unintended consequences not immediately seen.
The reason that EpiPens are expensive is because they're patent protected. In this case, regulatory protection that is the explicit issue. Demand for the product is clearly there; supply is not, not because there is nobody willing to provide it, but because the government prevents would-be competitors from doing so.
I am in the opposite camp. I characterize this as a free market success and as a failure of a civilized society to provide basic healthcare for its citizens.
I dunno. I bet it's a pretty small number. Fewer than 100 people die per year in the US from anaphylaxis and it's hard to find evidence that this number has risen along with the price of the EpiPen.
At the top end maybe the answer to your question is a dozen or so. About the same order of magnitude as the number of people that die due to dog bites.
How many people would die if the only manufacturer of the device goes out of business?
It's not a flippant question; their only competitor pulled their product off the market, because the cost of fixing bugs was too great. How would it have helped to force them to charge less?
There are from 30-950 cases per 100,000 people per year.
Or an 0.03% to 0.9% incidence rate. That sets an upper bound on deaths. It corresponds to about 100,000 to 3 million exposures per year. If 10% of those were potentially fatal without treatment, you'd be looking at 10,000 to 300,000 deaths/year. Keep in mind I just pulled 10% out of my ass.
You'd want to see how many people or cases would be untreated at the higher price level. But the information certainly supports the notion of thousands of deaths.
At 1,000 deaths, that's about 1.6 million in profits per corpse for Mylan, based on $1.6 billion in additional profit.
So a "used" epi-pen's internal syringe might contain 4-5x more epinephrine than actually goes into a standard dose? I assume this means most of the expense of making it comes from the housing/mechanics. (And recouping whatever cost of QA/approvals.)
I haven't worked with this class of medical device, but I expect the major cost of the unit is in the approvals and lawsuits.
So far as the pen itself - They've got some injection-molded plastic, where the mold costs are amortized across the production lifetime. A needle + syringe, which are probably subcontracted from Becton Dickinson. A spring. A printed label. And the medication itself (probably the #2 cost).
The assembly of the above all had to conform to the FDA's Good Manufacturing Practices rules. Every part & ingredient had to have trace-ability to their source. With documentation thereof.
When we got our device approved (in a looser classification than this) we had to get UL approval ($50k per test, per device, per test-run), and we had 3 people on staff whose sole purpose was navigating the FDA paperwork and their approval process. I never heard what that cost was, but it was substantial. And then we had an IP attorney, and corporate defense attorneys to respond to the inevitable lawsuits.
The drug itself is very cheap. With an Rx you can purchase an ampule with about 3 doses for < $10.[1] You can administer it with an insulin syringe, which I don't think requires an Rx. Of course administration is a lot more tedious and requires some training.
I worked at a summer camp where we would carry 1 or 2 pens plus a bunch of ampules if we were in a wilderness situation where we couldn't get to emergency care and needed more than one dose.
The drug is cheap...because it's unpatentable (as a molecule anyway) and is old enough that any patents would be expired anyway.
The marketing of autoinjectors has some legitimate public health value, but it's also a clear business strategy to get new drug prices for an ancient drug
If you have something concrete to say then say it. You're only lowering the quality of the conversation by making vague assertions in the style of "one weird trick" followed by mystery links to random places on the web.
How is this lowering the quality of the conversation? This is an insightful comment with a relevant video that shows that each Epipen actually contains 4 or 5 doses of epinephrine. Certainly relevant, as we are discussing how people nationwide are struggling to obtain enough of this drug.
Also, I would hardly call a link to YouTube "a mystery link to a random place on the web".
This "one weird trick" may save your life if you experience anaphylactic shock and do not have multiple auto-injectors available, for whatever reason (cost, some have expired, remote location, etc).
I discovered this technique a couple of years ago and was interested in it. I tried replicating the use with some expired autoinjectors. As far as delivering subsequent doses, I was able to reliably deliver 2+ more doses (into oranges) from my expired injectors. I feel better prepared for an emergency now.
I have never needed to use my autoinjector. I had one incident where I was very close to shooting up my thigh but the symptoms were just "mild" enough that I did not. I met another person with severe food allergies at THOTCON this year who described to me in detail two separate incidences where he felt it was necessary to administer two doses. I hadn't really given much thought to multiple doses before hearing his stories (one of which included a medically induced coma). Now I make sure to have at least two doses on hand. My doctor certainly didn't express to me the potentially dire necessity of multiple doses!
Of course, this bushcraft advice doesn't hamper my cautiousness about having autoinjectors around everywhere I may need them. I have a pair at my home, my office, my parents home, and my backpack (always with me when I travel). Eight autoinjectors, that need scheduled replacement, is a luxury I can afford. Others may not be so lucky and may be helped by these bushcraft techniques.
I do need to research the issue more though because my insurance currently covers eight autoinjectors (not EpiPen brand, but a "generic"? Lineage Therapeutics brand [0]) at the rate of $15 per two 0.3 mg injectors. I'm not sure if I'm lucky, have great insurance, or what.
There are generics. What is patented is the delivery mechanism. I've had to administer it twice. You take the cap off and just push it into the thigh. The top part moves back and the needle pushes through.
Other posts have pointed out that companies have tried and failed to produce generics. Seems like a really broken patent system if the patent isn't descriptive enough to allow competitors to actually produce the product. Isn't the point of filing the patent to allow things to progress once the inventor has had their monopoly?
For the same reason there were no competitors to daraprim before Martin Shkreli decided to be a complete ja. When the price is low enough that there's little profit to be had, nobody bothers competing because it's not worth the time, money, and effort to get FDA approval. When the price gets jacked up like that, you will find generics pop up quickly. The problem is the window between the price hike and when generics pop up can sometimes be years due to needing to get FDA approval.
In this case there was a competitor, but they recently had their product pulled from the market in an FDA recall. So Mylan decided: why not raise the price 600% (and rising) when it's a drug people HAVE to have.
Capitalism in action baby. Let's deregulate EVERYTHING!
If EVERYTHING were deregulated, the time, money, and effort to get FDA approval would also vanish along with this particular problem. Would other worse problems appear in its place? Maybe. But calling foul on free-market capitalism in the very most regulated market in the US is a bit disingenuous.
Hmmm... from your description, it sounds like the market is working, just not fast enough for everyone.
It's not worth it for a company to develop their own Epi-pen since profits are so low. Eventually enough drop out that one manufacturer raises the price. Significant profits result which attracts other competitors. Prices drop.
Would you just prefer the gov't to step in and set the price? What happens if companies decide it's not worth the effort? Have the gov't force them to produce the product?
> Would you just prefer the gov't to step in and set the price? What happens if companies decide it's not worth the effort? Have the gov't force them to produce the product?
Cut out the private market and have the government manufacture it directly.
Because there's no equivalent of the bioequivalence study that generic drugs go through. Even if it's an exact copy, making a generic medical device means you have to go through the same entire approval process that the original went through.
I'm pretty sure this isn't true. There are plenty of self-injector designs and many of them are off patent.
The real reason is that other companies have screwed up getting their devices approved. Other versions of Epi-pen were on the market and they were pulled since they didn't work.
Some discussions:
https://www.reddit.com/r/news/comments/4y5481/cost_of_epipen...
https://www.reddit.com/r/3Dprinting/comments/4y7f26/epipen_f...