Free market failures
One thing that the conservatives love to brag about is the free market. That works in an ideal world but in an imperfect world. You are just kidding yourself.
Take the famous example of the Epipen. It is a self-injection device for patients suffering from a severe allergy and their airways are closing will open their airways. The drug cost less than one dollar but the one shot injection device is priced more than 600 dollars. And before you think people should stockpile these items, the drug expires after a year.
So let's go to the "famous" solution of the free market:
Competitors:
It turned out that there are a few competitors but there are barriers to entry in this market. Since it is a medical device, it has to pass stringent testing which cost money and time. Even then some products still fail to make it to the market.
Substitutes:
There currently is a substitute but most doctors still prescribe the more expensive and familiar device. At this point, the substitute is not considered a generic (perfect substitute medically) so the pharmacist cannot just substitute it. In a perfect market, people will stop buying Epipens and the price of Epipens should fall but this has not happened yet.
For those people who suggest DIY, I agree it is possible but the person needs some skill (or regular practice) to inject themselves. This is on top of suffering the syndromes (Eg. closing airways) and then still preparing the injection and then correctly injecting the drug into the body.
(Full disclosure: I am trained to perform these steps and I can tell you that in real life, things happen. Syringes are damaged. People accidentally breaking the ampules which the drug is stored. And before anyone starts to suggest avoiding bees, I like to point out that patient I have encountered have been allergic to ants or even inhaling industrial chemical fumes. And those patients were fit soldiers.)
Rewarding innovators:
The Epipen was approved for marketing in 1987. It price started shooting up after it was acquired in 2007. It is rent seeking in short.
Hope for the kindness/goodwill of the supplier:
To be fair the company did make some attempts to resolve the issue. The company gave financial assistance with some strings attached. Patients who are not covered under the special conditions have to pay full price. The company is also offering to make generics but to date the house brand generics have yet to hit the market. (Apparently, it must be very difficult to make the same product but change the label.) I suspect that the Epipen contributing to 40% of the company's profit may be a reason.
Take the famous example of the Epipen. It is a self-injection device for patients suffering from a severe allergy and their airways are closing will open their airways. The drug cost less than one dollar but the one shot injection device is priced more than 600 dollars. And before you think people should stockpile these items, the drug expires after a year.
So let's go to the "famous" solution of the free market:
Competitors:
It turned out that there are a few competitors but there are barriers to entry in this market. Since it is a medical device, it has to pass stringent testing which cost money and time. Even then some products still fail to make it to the market.
Substitutes:
There currently is a substitute but most doctors still prescribe the more expensive and familiar device. At this point, the substitute is not considered a generic (perfect substitute medically) so the pharmacist cannot just substitute it. In a perfect market, people will stop buying Epipens and the price of Epipens should fall but this has not happened yet.
For those people who suggest DIY, I agree it is possible but the person needs some skill (or regular practice) to inject themselves. This is on top of suffering the syndromes (Eg. closing airways) and then still preparing the injection and then correctly injecting the drug into the body.
(Full disclosure: I am trained to perform these steps and I can tell you that in real life, things happen. Syringes are damaged. People accidentally breaking the ampules which the drug is stored. And before anyone starts to suggest avoiding bees, I like to point out that patient I have encountered have been allergic to ants or even inhaling industrial chemical fumes. And those patients were fit soldiers.)
Rewarding innovators:
The Epipen was approved for marketing in 1987. It price started shooting up after it was acquired in 2007. It is rent seeking in short.
Hope for the kindness/goodwill of the supplier:
To be fair the company did make some attempts to resolve the issue. The company gave financial assistance with some strings attached. Patients who are not covered under the special conditions have to pay full price. The company is also offering to make generics but to date the house brand generics have yet to hit the market. (Apparently, it must be very difficult to make the same product but change the label.) I suspect that the Epipen contributing to 40% of the company's profit may be a reason.
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