Bioethics & Pharmaceutical Prices

Just last week a man walked into my office holding a vile of insulin.  He told me its cost and how much it has increased over time.  He expressed genuine fear that people would not be able to afford it much longer and that they would eventually die because of it.

Later that day, I noticed that the Washington Post and other media outlets were running stories on the dramatic rise of cost of EpiPens—up 450% since 2004.  Given that this product saves lives, the spike in cost is quite concerning.  When it came to light that the CEO of Mylan, producer of EpiPens, is the daughter of a United States Senator, the indignation increased.  Just today, in an apparent attempt to save face, it is reported that Mylan will produce a generic version of the EpiPen that will cost half of the brand name.  (Please also see the blog of Mark McQuain on the EpiPen.)

Last week JAMA published an article entitled, “The High Cost of Prescription Drugs in the United States.”  It notes, “The most important factor that allows manufacturers to set high drug prices for brand-name drugs is market exclusivity…” If the playing field is cleared of all competition, there are few, if any, market forces that might cause prices to stabilize.  Especially disturbing was the discussion of “pay to delay”– when drug manufacturers pay the makers of potential generics to delay their production.

I have met those who argue strongly that the free market must be respected, even in the face of skyrocketing prices.  They say that pharmaceutical companies have the right to charge whatever the market will bear because they’ve done the hard work of research and development.  Undoubtedly, they argue, the companies will use the profits to develop other life-saving drugs.  Put simply, they conclude that it is the result of the law of supply and demand.  But if the pharmaceutical company has a monopoly endorsed by the federal government, is it really a free market?

It seems that by applying the principle of justice, bioethics may have much to say about the rising cost of prescription drugs.  In an age where incredible things are happening with the creation of life-saving drugs, it is important they reach as many people as humanly possible.

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Jon Holmlund
Jon Holmlund
5 years ago

I do not wish to try to defend Mylan’s pricing of the EpiPen, and price-gouging is not ethical behavior. Also, I must make full disclosure: I work in the pharmaceutical industry, in drug development. But implicit in this post, and I think Mark McQuain’s as well, is that problems arise when monopolistic or near-monopolistic conditions are fostered. Thoughtful and experienced commentators have noted that the problem is exacerbated if FDA sets manufacturing conditions that are so strict and costly that competitors exit the business as unprofitable. FDA is said to be trying to address this, for example, by speeding up review times for competing generic drugs and devices. Approval of competitors that are available elsewhere in the developed world would help as well. In today’s Wall Street Journal, the columnist Greg Ip wrote that in Europe, “EpiPen competes with several devices at a fraction” (5-10%) of its list price in the US, and that a common regulatory approval pathway for generic drugs would improve matters greatly. It seems to me that such prudential maneuvers would be more fruitful than limiting discussion to pure arguments about ethics. This leaves the question of whether more “socialized” approaches would be preferable. Briefly, I suggest they would not serve the public well, but that is not addressed by Neil or Mark, and is a topic for a different time.