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Morning Briefing

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Wednesday, Aug 24 2016

Full Issue

Perspectives On Drug Costs: The Role Of Patents; EpiPen Outrage Just One Example Of Pricing Problems

Recent commentaries about drug-cost issues.

The Food and Drug Administration and the U.S. Patent Office together give new drugs monopoly rights that last anywhere from eight and a half to 15-plus years. This helps explain why brand-name drugs account for 72 percent of drug spending in the U.S. even though they represent only 10 percent of prescriptions. Since 2008, prices for the most commonly used branded聽drugs have risen 164 percent -- far faster than other medical costs. The U.S. spends more than twice what other industrialized countries spend on drugs. (8/23)

The pharmaceutical company Mylan has been taking on a boatload of vituperation 鈥 and rightfully so 鈥 for jacking up the price of its lifesaving EpiPen injector, which reverses allergic reactions, by 500%.But there鈥檚 another reason to detest this remarkably amoral corporation: It鈥檚 also a tax dodger. Mylan is one of the leading exploiters of the technique known as inversion, in which a U.S. company cuts its tax bill by acquiring a foreign firm and moving its tax domicile to the acquired company鈥檚 homeland.聽(Michael Hiltzik, 8/23)

Three times in the last two weeks, people 鈥 a patient, a colleague and my wife 鈥 told me stories about how out of control the price of EpiPens were. Monday, my New York Times colleagues recounted in detail how expensive the devices have become in recent years. All tell the tale of how much even basic health care can cost in the United States. But by digging a bit further, the story of EpiPens can also explain so much of what鈥檚 wrong with our health care system. (Aaron E. Carroll, 8/23)

It's important to understand exactly what people are paying for when they buy the EpiPen. The cost of the life-saving epinephrine drug itself is minimal. Epinephrine has been around for more than 100 years and is easy to produce. The real costs come in connection to the EpiPen's auto-injector which delivers the drug to people who need it in a much easier fashion than a traditional needle and syringe. Mylan's patent on that auto-injector is the key to everything. And it's the government's protection of that patent that lies at the root of the price hikes that are leaving a lot of families struggling to meet the costs. (Jake Novak, 8/23)

When even 鈥減harma bro鈥 Martin Shkreli compares your company to vultures and wonders what drives its moral compass, you may have an image problem. Shkreli is the CEO of Turing Pharmaceuticals, the hedge fund posing as a drugmaker that last winter jacked the price of a drug used to treat malaria and HIV patients by 5,000 percent. Shkreli directed his comments late last week at Mylan, the makers of the EpiPen. (8/23)

Not to toot my own cool-guy horn, but I've seen a few drug deals take place in my time鈥擨 got my college degree from an infamous party school鈥攁nd at no point did any of them involve the exchange of cash for foreign political prisoners. (Ben Mathis-Lilley, 8/23)

In effect, the TPP would give drug companies wide latitude to jack up prices and costs of medications with their expanded monopoly rights and keep lower cost generics off the market. Its rules could not be altered without consensus by all signatories to the agreement. (John Greyman, 8/23)

Despite all the public outcry over certain drugs with high prices, none of those drugs have come down on their list price, instead choosing to offer a variety of discounts. So why not lower the list price, even a bit, to get the public off your back? "The answer is, you don't want to be the first one who caves," Ameet Sarpatwari said. "They're worried that it will start a chain effect." (Lydia Ramsey, 8/23)

This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
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