EpiPens and American Health Care

Lots of news this week about the rising price of EpiPens, life-saving devices that automatically inject the right dose of Epinephrine to control allergic shock:

Mylan, the pharmaceutical company, acquired the decades-old product in 2007, when pharmacies paid less than $100 for a two-pen set, and has since been steadily raising the wholesale price. In 2009, a pharmacy paid $103.50 for a set. By July 2013 the price was up to $264.50, and it rose 75 percent to $461 by last May. This May the price spiked again to $608.61, according to data provided by Elsevier Clinical Solutions’ Gold Standard Drug Database.

As Aaron Carroll explains, this is the culmination of a series of moves by the government and the manufacturer, all made with zero regard for cost. I think this bit is a perfect symbol of one reason why health care costs are rising:

Then in 2010, federal guidelines changed to recommend that two EpiPens be sold in a package instead of one. Studies showed that about 10 percent of children who received epinephrine from an EpiPen needed more than one dose. Better to be safe than sorry. Additionally, the Food and Drug Administration changed its recommendations to allow for the prescription of EpiPens for prevention for at-risk patients, not just for those with confirmed allergies. Mylan stopped selling individual EpiPens and began to sell only twin-packs.

So because 10 percent of children need a second dose, no more single doses will be sold, effectively doubling the price. And there is no benefit to, say, using one and keeping the other around, because Epinephrine degrades over time and EpiPens need to be replaced every year or so. If you want to know why health care costs rise inexorably, there is a big part of your answer: a determination to avoid any preventable risk. Newborns that would once have spent an extra day in the hospital, because of jaundice or breathing issues, are now transferred to neonatal intensive care units for a week of monitoring at a cost in the tens of thousands, because you never know which baby is the one in a hundred or a thousand who might otherwise die.

In the case of EpiPens we can add three other regular features of American health care: tight FDA regulations that make it difficult and expensive for competitors to enter a market like this one, the laziness of doctors who don't bother to prescribe a generic substitute even when one exists, and the insane greed of pharmaceutical companies.