There’s been a lot of talk this week about the EpiPen, and for good reason.
First developed in the 1970s, the EpiPen is a medical device that automatically injects a measured dose of adrenaline into the bloodstream, allowing for easy field treatment of allergic reactions. It’s near ubiquitous in schools, offices, airports and anywhere else that people gather, making it one of the best-selling medical devices on the market.
It’s also getting expensive.
Mylan Pharmaceuticals, the maker of the EpiPen, has raised the price of the device from $57 each in 2007 to $600 for a pack of two as of this year. That’s capitalism. They see strong demand in the marketplace for their product, so they’ve raised their price to a level that they believe the market will support.
But, this being a presidential election year, the price of EpiPens has turned into a political issue.
Lots of people, especially kids, rely on EpiPens to stay safe when faced with potentially deadly allergic reactions. It’s a life-saving device that needs to be affordable to all Americans. Mylan is just being greedy by overcharging for a device that so many people need to buy, they say. It’s perfect sound bite fodder for the campaign trail.
But that’s not the real issue here.
The fact is, expensive EpiPens are a topic of conversation this week for one reason: the fact that we have too many barriers to innovation in this country.
In the case of the EpiPen, Mylan has been able to raise the price of its product to current levels simply due to the fact that it faces effectively no competition. It has a monopoly. If you want an autoinjector device that delivers adrenaline, you’re buying an EpiPen.
Why? Because the FDA keeps denying the applications of potential competitors, or yanking similar drugs off of store shelves. Several EpiPen-like devices produced by Sanofi have been recalled in recent years, and Teva’s generic EpiPen was rejected by the FDA just this past February. The government is blocking progress.
The Wall Street Journal editorial page agrees with me, writing this week:
“Competitors have been trying for years to challenge Mylan’s EpiPen franchise with low-cost alternatives—only to become entangled in the Food and Drug Administration’s regulatory afflatus. Approving a generic copy that is biologically equivalent to a branded drug is simple, but the FDA maintains no clear and consistent principles for generic drug-delivery devices like auto injectors or asthma inhalers. How does a company prove that a generic device is the same as the original product if there are notional differences, even if the differences don’t matter to the end result? In this case, that means immediately injecting a kid in anaphylactic shock with epinephrine—which is not complex medical engineering.”
That’s a blockage. That’s a government policy that has allowed Mylan to charge whatever it wants for the EpiPen. That’s the real problem.
The good news is we have a solution. We know exactly who is going to stand up and solve this problem for us.
The American entrepreneur has been transforming industries and improving our collective quality of life for generations. From Henry Ford, to Steve Jobs, to Sam Walton, entrepreneurs create scalable solutions that change how the world operates, and their ideas and innovations shape entire industries.
Innovative thinking brought us the EpiPen in the first place. Now we need innovative thinking in healthcare to make sure our entrepreneurs are able to do their work and make a difference.