5 myths about the EpiPen controversy

The high price of EpiPens introduced a nationwide discussion on Mylan's pricing practices and the overall state of the drug industry. However, not all parts of the discussion have been accurate.

Here are five myths about the EpiPen pricing scandal, according to The Nation.

  1. Mylan is the outlier. In reality, Mylan is just the most recent case in a string of drug companies that made major price hikes on crucial treatments. First it was Gilead Sciences, which sold its hepatitis C drug Sovaldi for about $1,000 a pill. Then, it was Valeant Pharmaceuticals, which boosted the price of two heart drugs by 525 percent and 212 percent. More recently, Teurig Pharmaceuticals raised the price of the AIDS drug Daraprim from $13.50 to $750 overnight.

  1. Competition alone will lower prices. A common assumption exists that generic competition will eventually drive down the price of expensive new drugs on the market. However, drug prices have sharply increased, even for drugs with multiple suppliers, according to the report. Rather than trying to undercut each other, competing suppliers often both raise prices.

  1. High prices are crucial for innovation. Mylan CEO Heather Bresch joins numerous drug executives who argue that high drug prices reflect the research and development investments needed to bring the treatments to market. A study published in August in the Journal of the American Medical Association found drugmakers usually invest about 10 to 20 percent of their revenue in research and development. The authors found "little evidence" that drug prices reflect the cost of research and development. "Prescription drugs are priced in the United States primarily on the basis of what the market will bear," the authors wrote.

  1. The FDA is to blame. The Food and Drug Administration has been the target of criticism amidst price hikes, with some individuals blaming the agency for the lack of competition for EpiPen. Earlier this year, the FDA rejected epinephrine auto-injectors from Teva Pharmaceuticals and Adamis Pharmaceuticals. While the agency has a backlog of more than 4,000 generic drug applications to review, pharmaceutical giants like Mylan are also to blame for the approval delays and lack of competition. Last year, Mylan submitted a "citizen petition" to the FDA, asking the agency to reject Teva's generic EpiPen. While these petitions are meant for members of the public to ask the agency to refrain from approving a generic drug over potential health concerns, a majority of the petitions are submitted by major drug companies seeking to delay the approval of competing drugs.

  1. Congress needs to make the first move. While 15 drug-pricing bills were introduced to Congress, none of them left the committee, according to The New York Times. The failure of these bills may reflect the $240 million the pharmaceutical industry spent on lobbying last year — more than any other industry, according to The Nation. If public outrage over high drug prices does not push Congress into action, the Obama administration — or the next president — can enact the Bayh-Dole Act to break up patent monopolies. The legislation calls for any drug developed through public financing to be made publicly available on "reasonable terms." If not made accessible, the government can license the drug to other suppliers. Since EpiPen's precursor — the ComboPen — was created with funding from the Department of Defense, the law may apply to Mylan's device.

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