Eminent Domain for Overpriced Drugs
Today on TAP: Exhibit A is the case of the EpiPen. It should cost a few dollars rather than the $600 or more charged by monopolist Viatris.
by Robert Kuttner
August 7, 2023
Rich Pedroncelli/AP Photo
The basic autoinjection technology of the EpiPen is simple and should have been considered generic decades ago.
Lindsey Ulin is a medical resident at Boston’s Brigham and Women’s Hospital. She was on a plane when she noticed hives appearing and felt her throat closing. As a physician, she recognized the symptoms as potentially fatal anaphylactic shock.
Dr. Ulin knew that the needed intervention was a fast and strong dose of epinephrine. She immediately called a flight attendant, knowing that planes carry EpiPens as part of their emergency kits.
But it turned out that the airlines have stopped carrying these simple devices, which anyone can use, in favor of a glass vial of epinephrine that requires a separate hypodermic needle to administer. Dr. Ulin later wrote in a medical newsletter, in a piece adapted and reprinted by The Boston Globe, “I’m alive today because another physician happened to be on my flight and knew how to safely give epinephrine from the glass vial stocked in the kit. But others may not be so lucky.”
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Why did airlines stop carrying easy-to-use EpiPens? Because they cost several hundred dollars, while a plain, hard-to-administer vial of epinephrine costs about $5. In her article, Dr. Ulin points out that airline emergency kits included EpiPens until 2016, when they got an FAA waiver. She blasts the airlines for pinching pennies at the expense of passenger safety, as well as the FAA for letting them get away with it.
But while the airlines have a deplorable record on many fronts and could well afford EpiPens, in this case Dr. Ulin has fingered the wrong prime villain. If there is one industry more appalling than the airlines, it is Big Pharma.
Epinephrine pens ought to be cheap and easily available. For all intents and purposes, they are generic devices. But one company, Mylan, recently renamed Viatris, has used a combination of patent manipulation, litigation, and anti-competitive tactics to keep its near monopoly on auto-injector devices, a simple technology that is 50 years old.
In February 2022, Viatris paid $264 million to settle a class action lawsuit that alleged the company had engaged in a scheme to delay generic competition. That $246 million is chump change compared to the billions Viatris makes by using its monopoly power to price-gouge. The company made over $2 billion in 2022.
As the Prospect has reported, the government has a seldom-used eminent-domain power known as march-in rights, which allows it to license patents to producers other than the patent owner if a drug or device was developed partly with public funds and is urgently needed for public-heath purposes.
The EpiPen was privately developed back in the 1970s, but piggybacked on autoinjector technology first developed to deliver antidotes to protect military people who were exposed to nerve gas. It’s a close question whether the government could use march-in rights to license EpiPen technology, but this simple, lifesaving device is a poster child for the creative use of eminent domain. Even the threat should compel the company to cut its prices.
Congress needs to act to broaden government’s ability to go after the price-gouging and patent abuse that is endemic in the drug industry. Another alternative is to ease imports of competing products. Britain has approved a competing epinephrine autoinjector, Jext, which costs about $50.
The basic autoinjection technology is simple and should have been considered generic decades ago. Viatris’s game is to keep patenting embellishments and then contend that the basic technology is still proprietary.
In July 2021, President Biden issued a whole-of-government order requiring every agency to use its powers to promote competition. That surely includes the NIH and the FDA, which have been far too protective of drug industry monopoly profits.
Robert Kuttner is co-founder and co-editor of The American Prospect, and professor at Brandeis University’s Heller School.
August 7, 2023
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