The EpiPen saga goes on with Mylan, the company that produces the epinephrine auto-injector, taking attacks from multiple sides. Perhaps the weakest and most nonsensical comes from Former Secretary of State Hillary Clinton.
EpiPen is a lifesaving treatment that gives millions of allergy sufferers a shot of medicine that can keep them from going into severe shock, including lots of school kids. Prices for EpiPen have skyrocketed over the past almost ten years by over 400 percent – going from $57 to over $600.
Clinton was quick to come out against Mylan and now has a plan to ensure that pharmaceutical companies don’t increase drug prices in the future: more government red tape and bureaucracy. She proposes creating a new consumer response team with oversight at federal agencies to police prices and means of production for drugs and intervene when they want.
The new regulators would have enforcement tools to intervene in making alternative treatments available, expand importation of alternatives from developed countries such as Canada, and to penalize companies who increase prices with fines.
Unwilling to waste a crisis, Clinton is also using this opportunity to plug her plan to lower prescription drugs as well. As Time reports, she thinks this will stop the greedy companies do it:
“Over the past year, we’ve seen far too many examples of drug companies raising prices excessively for long-standing, life-saving treatments with little or no new innovation or R&D,” Clinton said in a statement released by her campaign.
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“This is not an isolated problem,” the statement read. “Between 2008 and 2015, drug makers increased the prices of almost 400 generic drugs by over 1,000 percent. Many of these companies are an example of a troubling trend — manufacturers that do not even develop the drug themselves, but acquire it and raise the price.”
Why do policymakers think that solving the problems of big government require more big government. Like solving social problems with more money.
We reiterate that the monopoly situation Mylan enjoyed was largely created because of Washington. Big business and big government worked together to limit competition and supply while boosting demand. The FDA has been slow to approve alternatives and the Obama Administration working with Congress created a cozy deal to supply school with EpiPens.
Getting the FDA moving along in approving alternatives is a welcome move, but that is already being done by various congressional committees as we reported.
Importing drugs from other countries is a quick way to expand the supply that should be on the FDA’s radar already. Perhaps this attention will turn up the heat on them, rather than prodding from a new swat team.
The most questionable solution though is fining companies. How do you fine companies for price increases? How do you determines who deserves the penalty? What is the right penalty? It’s both unworkable, subjective and patently unfair. It’s easy to create a scenario where abuse can occur.
Sky-high pricing hits us hard whether for medicine or Uber rides. They are both signals that the supply of a desired good or service is limited. At least, with Uber, more drivers are lured onto the roads when they know they receive more for the rides they give. Eventually, enough drivers fill the demand and prices return to normal. However, because of Washington red tape and policies, the ability for competition to lower prices on medicine is not so easily adjusted. That’s a result of market interference, not a call for more intervention.
There’s plenty of blame to go around, but Clinton is only proposing that we drop the hammer on Mylan. That misses the point about cronyism in Washington and asking those in the system to fix a broken system is an exercise in futility.