The Latter Days of a Better Nation, Part IV

 

Good news this morning for those who depend on EpiPens.

Well, not good news good news, but better news than yesterday anyway.

Mylan, the pharmaceutical company which manufactures the EpiPen epinephrine autoinjector, announced today that they are (not really) lowering the prices of the medical device. Mylan is also expanding its voucher program for low income/uninsured patients to provide access to the devices more or less free of charge.

The prices are still significantly higher than they were a year ago, but much better than they were last week.

This comes after weeks of public outcry over Mylan’s drastic price increases for the lifesaving device.

Over the last few years users of the Epipen saw their out-of-pocket costs increase by more than 500% in some cases, meaning that for many their costs increased from $120 per set of two EpiPens to anywhere between $400 and $700. Many severe allergy sufferers might need as many as six to eight Epipens per year depending.

It’s doesn’t take a Wall Street Pharma Bro to do that kind of math.

That’s one hell of a burden on one hell of a lot of people.

Naturally, predictably, rightfully, many Americans were outraged.

The price increases meant that for many, the EpiPen was no longer an option. And for a significant number of people, that meant a radical change in their lives. Some of the people I spoke to told me they simply couldn’t risk going outside until winter, because if they were stung by a bee they would die. They couldn’t risk letting their kids go to school because exposure to a single peanut might kill them without an EpiPen immediately available.

Now, for those who don’t suffer severe allergies, this kind of paranoia might seem overly dramatic.

It’s not.

People die.

Children die. Adults die. It happens. They always have, usually at young ages, you just never heard much about it. We chalked it up to poisoning or crib death or any of various maladies. But people have always died from severe allergic reactions. In the past many of those folks didn’t know they were allergic until they were choking to death. But now with increased awareness and education (much of it sponsored by Mylan and other Big Pharma), advancing medical technology and better diagnostic tools, many of these people are aware of their sensitivities and with devices such as the EpiPen readily available they can live normal lives.

For those not familiar, the EpiPen is a drug autoinjector – basically an automatic hypodermic needle anybody can use. You pop off the safety cap, press the tip against muscle tissue and push, a spring-loaded needle stabs into your flesh and a measured dose of a drug (in this case Epinephrine (adrenalin)) is forcefully injected directly into the muscle tissue. It sounds violent and painful and it is, it leaves a hell of a bruise (trust me on this), but you get to live which is always nice. Use of the EpiPen requires minimal training and can be used in seconds. And this matters because while epinephrine is used to treat a variety of conditions, in this case it’s being use to prevent anaphylaxis – i.e. a severe allergic reaction where breathing tissues – i.e. your throat! – can swell closed, which typically results in death via asphyxiation unless there’s somebody right there who knows how to perform a tracheotomy with a pocket knife and an ink pen. 

Having your windpipe close up is generally considered a pretty terrible way to go.

People with severe allergies, peanuts, bee stings, shellfish, etc, depend on the EpiPen for their very lives. Many carry the pen on their person at all times because should they suffer an allergic reaction there simply isn’t enough time to wait for medical personnel. Some severely affected people can literally suffocate in minutes. This is especially true in the case of children.

Overly dramatic? The ironic thing is that’s usually the opinion of the same people who think they have to have a gun immediately at the ready because it takes too long for the police to arrive.  I digress.

While there are other devices available, from other manufactures and including Mylan itself, the generic versions are cheaper but are more difficult to operate. And that difficulty is the problem. You see, the Epipen autoinjector is the standard – by design and intent.  It’s what first responders and emergency room personnel and patients themselves are all trained to use.

I myself have been taught to use the Epipen. I have trained many others. (No, I don’t suffer from allergies, more on that later). 

The generic devices work differently. And those differences can take minutes to figure out – when you don’t have minutes.

Moreover in many states, because these are medical devices, doctors have to write the prescriptions specifically for the generic version or the pharmacist can’t issue them and insurance won’t cover them (sometimes insurance won’t cover them even if the doctor does write a prescription specifically for the generic. The rules governing this are complex and difficult to understand even for medical professionals and it varies by state).

It’s complicated and frustrating and downright frightening for a lot of people who could find themselves choking to death while reading this essay.

 

A number of readers, those dependent on Mylan's Epipen either for themselves or for their loved ones, wrote asking why I hadn't posted anything on this subject either here or on my Facebook page.

 

I was waiting.

I was waiting for this, for Mylan to lower their prices.

As I said to those readers in private correspondence, I expected it to take about a week. And here we are.

Companies who depend on public approval for their stock returns don't do well when they come across to the public as greedy evil bastards willing to kill sick people for for a buck. Not unless they're defense contractors with billion dollar government contracts that is. Mylan isn’t that.  And I digress. Again.

Nor is Mylan run by a Wall Street pharma-bro like Martin Shkreli – not exactly anyway – though that comparison is so ubiquitous now I’ll be hard pressed to convince you otherwise.

But it’s true.

You see, Shkreli is an opportunistic douchebag perfectly willing to profit off the misery of sick people. He honestly doesn’t care if people die, so long as he turns a profit and he’s said so and grinned into the cameras while doing it. The man is purposely vile, he knows it and revels in his reputation. That’s nothing new for people like Martin Shkreli. He’s a hedge-fund manager, not a pharmacist, and he acts like one – absolutely no different than those greedy opportunistic Wall Street investment bankers who crashed the world economy for their own selfish ends.

The difference between Shkreli and Mylan is that his company, Turing, was by design a one-hit wonder.

Turing Pharmaceuticals owned the patent on a single critical drug, Daraprim, which is why Shkreli bought it. He knew what would happen when he jacked up the price and he didn't care – in fact public outrage was very likely his goal. Being hated made Shkreli famous. Being called the most hated man in America was the Holy Grail for Martin Shkreli.  Your hate meant everything to him because Shkreli wasn’t interested in running a drug company, he only wanted the money he could squeeze out of it before dumping it and moving on.  He wasn’t making money from those dying of AIDS/HIV, he was making money from hedging the investment. This is a well-greased Wall Street model, it's how business is done every day in America. It's just that most of the time you don't hear about it because it doesn't blatantly turn people dying of a hideous disease into Soylent Green.

Mylan is different.

Mylan is vast global pharmaceutical company registered in the Netherlands and headquartered out of Great Britain. Most of what they make is generic drugs – the less expensive formulas of name brands used by millions of low income and uninsured people all over the world.  That’s right. Without Mylan poor people would be paying a hell of a lot more for routine drugs.  

Mylan also holds the patents on certain specialty devices, such as the Epipen.

Now, Mylan has the a right to make a profit, just as Shkreli did.

Yes, I can hear you screaming. Go on and get it out your system.

But it’s true. The company has a right to make a profit. The morality of making a profit off sick people is a topic for another time and I’m not going to go into it here. It is how it is at the moment and it’s not going to change without a radical restructuring of our civilization. Deal with it.  

Unlike Shkreli, however, Mylan’s bottom-line very much depends on public opinion*. Once their stock started tanking, their response was perfectly predictable.

(*Note: The criminal case against Shkreli is still in progress, but it seems likely based on the charges and his track record that he was involved in a complex scam to manipulate the market in order to short his own investments -- basically betting against himself. If that was the case then the greater the outrage and the worse public opinion, the better his profits. It’s shady as hell and often illegal and depending on how his trial goes, maybe worth a long prison sentence. Welcome to Wall Street).

The primary difference between Mylan and Shkreli is that Mylan (like most pharmaceutical companies) has every reason to keep their customers alive, heathy*, and happy.  Dead people don’t buy Epipens.

Shkreli had no such interest.

(*Note: please don’t start in with the “Big Pharma wants you sick so they can sell drugs” nonsense.  That’s a ridiculous conspiracy theory, easily proven false as many times as you care to run the experiment. Big Pharma isn’t evil and without the drugs they produce every single day, many of you wouldn’t be here or would suffer a vastly worse quality of life. People get sick. They get injured. They have allergies. Diseases evolve, new ones emerge every day. Big Pharma profits far more from making you happy, healthy, and a satisfied customer than they ever would by keeping you sick. So just don’t**)

(**Note: Yes, I realize you will now brand me as a shill for Big Pharma and add me to the conspiracy to keep you sick. Go on. Feel free. Just do me a favor and keep it to yourself and out of my comments section. Thanks. Also, if you see my huge check from Big Pharma, please pass it along because I sure could use it)

 

All of that said, this is a damned good example of what's wrong with the American healthcare system.

 

Under this story on The Hill, commenters are waging a full out war with liberals on one side and conservatives on the other. Neither seems to have much understanding of the actual situation.

For example, commenter Scott declares:

"Regardless of who's paying (taking ACA out of the picture) they have jacked the price for pure and utter greed."

To which one Daniel Gray responded:

"THEY are the ones that invented the drug and the ability to dispense it, so THEY have the right to decide how much to charge for it. Using your logic, if you invented something that people found out later that they needed it I then suspect that you would be ok with the Government or someone else coming in and telling you that you had to sell them for $.03 each and eat the cost of developing the drug and the dispensing system that cost you close to a couple hundred million dollars, as well as the pay of all the employees and so on. These companies just cant win with people like you. If they make something you dont want them to be able to get their money back from what they spent on it, and if they do what you want and then have to lay off people because they dont have money to pay them, then you go after them for that. Stop buying into the left wing BS. Your invention, YOU set the price, not some cubical critter in DC."

Both commenters are wrong in varying degrees.

Shkreli jacked up his prices out of unvarnished greed. He gleefully admitted as much – it's why he bought the expired Daraprim patent in the first place and founded Turing Pharmaceuticals. Greed was his entire business model. But again, he’s a hedge fund manager, this is what they do. This is why Wall Street needs to be regulated – a topic we’ll come back to in a bit.

Mylan increased prices for profit, certainly, because they have to make a profit for their shareholders and they have every right to do so, but that wasn't the only reason. Scott says “taking the ACA out of the picture,” but the thing is you can’t take the ACA out of the picture. Complex economic factors and unexpected market pressures driven by implementation of the Affordable Care Act factor directly into the price increase – and that is entirely on Congress who has repeatedly and emphatically failed to act.  And to a certain extent on the President who has not made this flaw (and others) in his signature legislation a national issue and publicly demanded Congress stop screwing around and get on it.

This situation, and dozens more like it, could have been avoided, if Congress would do its goddamned job and start fixing the Affordable Healthcare Act – or even replace it with something better as Republicans have been promising for eight years now but have as yet failed to produce a single legislative improvement despite majorities in both houses. And without the ACA, the costs would be even higher and 20 million more people would be uninsured.

Congress could fix this.  

That’s their job.

No legislation is perfect, it can’t be. The world is simply too complex. Legislation is too complex. Social Security, Medicare, the National Highway Act, the Voting Rights Act, the Anti-Trust Act, every major piece of legislation was flawed in some fashion. There are always unforeseen side effects. That’s Congress’s job, to fix those things and to keep fixing them as new problems emerge.

But they won’t.

And they won’t because just like Martin Shkreli, they’re more interested in their own selfish satisfaction than they are in keeping the rest of us alive.

Congress has always fixed the problems with various laws, in fact that’s about 80% of what they do. Right up until President Obama came along, when petulant childish obstructionism became more important than your life.

Congress would rather let you choke to death than give one inch to President Obama.

Then there’s the other side of the argument:

“THEY are the ones that invented the drug and the ability to dispense it…”

Wrong.

Wrong on both counts.

Epinephrine is a compound produced by the adrenal gland. It was first isolated by a guy named Jokichi Takamine, a Japanese chemist who immigrated to the United States in the late 1800s. Takamine’s 1901 patent for “Process of Making Diastatic Enzyme,” US Patent #525,823, was the very first patent ever granted for a glandular hormone. Synthetic versions were later developed and patented. Most of those patents have long expired.

Mylan didn’t “invent” epinephrine.

And they don’t own it. Nobody does.

The amount of epinephrine per typical dose is at most a few cents. Combined with other compounds to increase the effectiveness of the drug and decrease side effects (variations of which are how you make generics), each injection costs around $1.00US.

But what Mylan does own is the patent on the EpiPen autoinjector – the device that allows somebody going into anaphylactic shock to self-inject themselves with epinephrine. Or allows a bystander, any bystander trained or not, to do the same.

That’s what they’re charging you for.

But see, here’s the funny part: they didn’t invent that either.

The EpiPen was developed by Merck Pharmaceuticals from the Mark I NAAK ComboPen,

Remember I told you I was trained in the use of the autoinjector? It was the Mark I.

NAAK stands for “Nerve Agent Antidote Kit” in case you were wondering. 

Military folks, particularly those who serve on the front lines, are intimately familiar with this beast or the newer version called the ATNAA (Antidote Treatment Nerve Agent Auto-Injector).  It was designed by the US government during the Cold War specifically to help military people survive a nerve agent attack. The drugs injected are not epinephrine (atropine sulfate and pralidoxime chloride and anybody who took my class better still be able to spell pralidoxime chloride in their sleep), but the device and method of use are almost exactly the same as the EpiPen.

Mylan acquired the various patents for the EpiPen and other autoinjectors from Merck when the company bought Merck’s generic drug division in 2007.

Now, pay attention: Merck never did much with the EpiPen. It was around, people could buy it, those with allergies knew about it and bought the device or one of the various other models available, but it wasn’t common. It was fairly cheap, but a lot of people who could have benefitted from wider availability didn’t have access to it. There were several versions on the market, there was no standard, and it was hit or miss which type you might come across.

Mylan’s CEO, Heather Bresch, the woman people are right now comparing to Martin Shkreli, set about making the-easy-to-use EpiPen available to everybody.

Her plan was to make the EpiPen ubiquitous. Simple, easy to use, and available everywhere. She undertook a program to increase awareness of the dangers of anaphylaxis and severe food allergies – which is why so many people actually know about them today. She successfully lobbied the FDA to approve the EpiPen for use in treating those conditions. And she successfully lobbied Congress for legislation and funding that makes EpiPens available the same way defibrillators are – and in fact she hired the same people who designed defibrillator legislation to design the EpiPen legislation. She started programs to help uninsured and underinsured people get access to the EpiPen. She got EpiPens into ambulances and first aid kits and schools and restaurants.

These efforts have directly and provably saved many lives.

So, what am I saying here? Bresch is some kind of hero? That Bresch did all of this out of the goodness of her heart. That she isn’t out to make a profit? No, of course not. Don’t be stupid. Bresch saw an opportunity, she saw how an obscure device could be used to seize the majority of the market-share in the area of emergency allergy first aid. And she took it and pushed that idea all the way. As a result, her vison and leadership increased profits for Mylan in this one area from about $200M in 2007 to over $1.5B in 2015.

Of course she did it for profit. Of course she did. But she saved a lot of lives along the way.

That, that right there, is what a good CEO does.

Heather Bresch is no Martin Shkreli and Mylan isn’t Turing.

 

Yes, I hear you there in the back, screaming in outrage. Yes, I know. Mylan is a tax inverter. Bresch took advantage of corporate tax loopholes to cut Mylan’s tax burden and increase profits (though their shareholders are likely to get a hefty capital gains whammy this year).  Yep. And it was all perfectly legal. And frankly if I was the CEO of Mylan, I’d have done the same thing. If I could save my company millions and increase stockholder returns, I’d be negligent in my duties not to do so. That’s what they pay CEOs for. Bear with me for a bit, we’ll come back to this.

 

Now, a side effect of this increase in availability, combined with unforeseen side effects with the ACA, resulted in massive price increases for the EpiPen. Some of which was deliberate on the part of Mylan, but not all.

And so here we are caught between the rock of capitalism and the hard spot of our obligation to those in need.

And it’s not as simple as greed.

And it’s not as simple as need.

“… if you invented something that people found out later that they needed it I then suspect that you would be ok with the Government or someone else coming in and telling you that you had to sell them for $.03 each and eat the cost of developing the drug and the dispensing system that cost you close to a couple hundred million dollars, as well as the pay of all the employees and so on. These companies just cant win with people like you. If they make something you dont want them to be able to get their money back from what they spent on it, and if they do what you want and then have to lay off people because they dont have money to pay them, then you go after them for that. Stop buying into the left wing BS. Your invention, YOU set the price, not some cubical critter in DC."

None of that is true.

Mylan didn’t develop either the drug or the device.

They did have to pay for acquisition of it however. It cost them about $6.7 Billion in fact. They have to make that back – and hopefully a lot more, otherwise it was a bad deal by definition and it’ll be bad not only for Mylan, but for everybody else too.  

Now, leaving aside Mylan’s obligation to its shareholders, does the government have a right to decide what a company can charge for their product?

Should the government have that power?

What happens when government sets the prices of goods? Anybody? There’s a name for that type of government, you know. And historically speaking, how does that typically work out? I’ll leave the answer as an exercise for the reader.

The commenter above doesn’t think government should be able to regulate prices – though one suspects he might have a different outlook if he had to buy EpiPens out his own pocket to keep his kid alive.

Then again, maybe not – and I’m digressing yet again.

But – but – here’s the thing the commenter is missing: The US taxpayer paid for the original design. 

That’s right.

The US government paid for the development and design and manufacture of the Mark I NAAK ComboPen.

Now, why shouldn’t the people who paid for that design have some say, via their government, in how that device is made available to the public?

We regulate prices for all kinds of products critical to the public good, either directly or through anti-trust laws.

Electricity is a good example here. We regulate utility prices specifically because in the modern world most people can’t do without electricity, and because electricity in many areas is a monopoly.  Without regulation that monopoly could raise prices to any level they wished and people would have to pay up or learn to do without.

Mylan – by deliberate design of their CEO – owns what is essentially a monopoly on the autoinjector market.

People die without it.

The same people who paid for its design through their tax dollars.

Tax dollars that Mylan has found a way not to pay.

So why shouldn’t those people have a say in how that the device is regulated and sold?

Look here: Mylan isn’t a villain. Mylan has a right to make a profit, as much as they can so long as its legal. Mylan has a right to take advantage of the tax loopholes, they’d be fools not to. Mylan’s CEO has every right to set her salary at whatever the shareholders will accept. And if we are to be truthful with ourselves, Mylan and companies like them do a lot of good – far more good than bad and our modern lives would be radically lesser without them and in fact if it wasn’t for people like Heather Bresch, we wouldn’t be having this argument because most of you would never even have heard of the EpiPen.

Without the incentive of capitalism, this situation wouldn’t even exist and hundreds, maybe thousands, of people would be dying every year of anaphylaxis.  

But Mylan’s interests are not ours.

And you’re a fool if you expect altruism from corporations.

It is the government’s job to balance capitalism against the needs of the citizenry via regulation.

And that responsibility rests squarely on Congress.

Congress has traded away your health and safety – and your tax dollars – in their mad vendetta against the President.

They are all, each and every one, responsible. And any death that results is squarely upon those sorry sons of bitches.

Congress could fix this. They could rewrite the tax laws to eliminate the loopholes, they could set fair regulation of critical medical devices including the EpiPen – regulations that are fair both to industry and fair to the citizens who need them – and they could use the resulting increase in federal money to subsidize in various degree EpiPens and other healthcare for all citizens exactly as the president intended eight years ago. They could do all of this today, right now. But they will not.

Mylan and the EpiPen is but one of a thousand similar problems that directly affect the quality of life for people all over the world. Every. Single. Day.

Those problems could be solved if the people responsible would only do the job they were elected and paid to do.

But they will not.

They will not.

 

Look, let’s get something straight here: I have no intention of being an apologist for the pharmaceutical industry. Or for capitalism itself.  But this is the world we live in and if you’re expecting altruism from Wall Street at the shareholders’ expense you are a fool. It’s not going to happen, ever – even if the company’s motto is “Do No Evil” because evil, like ethics and altruism, is subjective.

The only way to make this better for all of us is via the mechanism put in place by our Founders.

In the end, you hold the power.

Come this November, remember this betrayal. Remember this petulant, childish eight year long tantrum. These lousy sons of bitches would let your child choke to death before they cooperate with each other or the president and there’s absolutely no reason whatsoever to believe they will change in the future.

Remember that when you go to the polls to elect a new congress and a new president.

If you want a better nation, be better citizens.

If you want a better nation, you have to elect a better government.