The controversy about the dramatic price hike in EpiPens—548% since 2007—by drugmaker Mylan has made headlines. I’ve paid close attention to this controversy, since I’m one of the millions of Americans who relies on EpiPens for life-saving adrenaline to halt allergic reactions (in my case, a peanut allergy).
Given that 3.6 million Epipen prescriptions were written in the United States last year, it’s no wonder that this story has generated lots of attention. The headlines have been about big price hikes, but this is also a tale about why we should be skeptical about certain forms of corporate philanthropy—more about that in a minute.
In case you’ve missed the EpiPen controversy, a brief recap: adrenaline is the only drug that can halt very severe allergic reactions. Adrenaline itself is not cutting-edge—it was identified in 1901—and can be produced cheaply. What makes EpiPens valuable is how they deliver adrenaline: they deliver a pre-measured dose of adrenaline in nearly panic-proof “auto-injector,” which allows adrenaline to be administered quickly in a crisis. People at risk for severe allergic reactions simply must have EpiPens—especially since a rival auto-injector was withdrawn from the market last year.
EpiPen’s price has shot up dramatically: from $94 to $609 in under a decade. For the uninsured, or for those who have high-deductible plans, or even for many ordinary families with the usual day-to-day expenses of keeping kids in sneakers and school supplies, filling an EpiPen prescription is a big expense. Mylan CEO Heather Bresch asserted that no one is “more frustrated” than she is about high prices, but one may suppose the frustrations of consumers facing skyrocketing costs are running yet higher, especially when they are skeptical that price hikes set by highly-paid Mylan executives for a long-ago discovered drug delivered in a long-tested way are remotely justified.
Mylan has tried to buffer the controversy by expanding its programs that supply savings cards to patients with high out-of-pocket costs, that assist households with incomes less than 400% of the federal poverty line, and that provide EpiPens to schools. These “philanthropic” programs help mask the fact that higher costs are passed on to insurance companies and Medicare, raising the price of health care in the long run for everyone who pays insurance premiums as well as taxpayers. These programs may be part of a calculated profit-maximizing strategy rather than true philanthropy.
Businesses and the free market are essential to the liberty of America but by their nature they primarily serve their shareholders’ interests rather than philanthropic ends. Passing off patient assistance programs as philanthropy obscures the issue at hand—and confuses how businesses and philanthropists each make essential, but fundamentally different, contributions to the American polity.