It was bad enough pharmaceutical giant Mylan jacked up the price of the life-saving EpiPen from $100 to $600 since 2007, but when it announced this week it would sell an identical generic for $300, it underscored the maddening state of American health care.
The EpiPen, which gives people with severe allergies an emergency dosage of epinephrine, is an exclusive product of Mylan. Competitors are developing alternatives, but some hit unexpected setbacks or may not be ready for market for a year or two. That gives Mylan control over its drug costs for now, something free marketers may argue the company should have.
But should they? The forerunner of the EpiPen, and many other health products, was developed by tax supported researchers. The pen makes a fortune for Mylan from Medicare and Medicaid as well as public schools where the pens are in the school nurse's emergency kits, thanks to a lobbying effort by Mylan.
Drug makers are entitled to make a profit. But public investment and simple human decency argue that there is a clear public interest to control the price of drugs.
The EpiPen isn't the only example of price gouging. A year ago, Turing Pharmaceuticals raised the price of daraprim, used in the treatment of HIV and malaria, from $13.50 a pill to $750. Following public outrage, it lowered the cost to about $375. Sound familiar?
Sovaldi, a relatively new treatment for hepatitis C, costs $1,000 a pill. That was enough for the Senate Finance Committee to find the cost was unjustified. But little has happened to lower the price.
It's almost remarkable that the Senate held hearings. Among the top contributors to House and Senate campaigns, the health industry has already spent over $160 million on the current races.
Lobbying is even more extravagant. The industry last year spent $500 million, almost half of which ($240 million) came from pharmaceutical and health product companies, according to the Center for Responsive Politics.
In Mylan's defense, CEO Heather Bresch blamed Obamacare noting that people became upset with the price hike because they have high-deductible health care policies. But Bresch failed to note the high cost of health care helps drive the high cost of insurance. Both should be addressed. High deductible policies give consumers a choice of, let's say, spending money they don't have or going into anaphylactic shock. Drugs that can ricochet from $100 to $600 make the consumer's struggle all the more difficult.
Thankfully, several members of Congress are calling for hearings, but those hearings must lead to reining in pharmaceutical costs.