It’s almost as if Mylan, maker of the EpiPen, had drawn up a list of ways to game a dysfunctional health care system — and decided to check off every last one.
On Monday, the company announced a generic version of the EpiPen, the device that makes it easy to inject epinephrine into people undergoing severe allergic reactions. Price hikes that pushed the product’s list price above $600 for a two-pack have led to weeks of public outrage. News of a $300 generic version could help get Congress off the company’s back.
But for Mylan and its CEO, Heather Bresch, the generic is also a shrewd business move. The price is still high enough to generate lots of money. Indeed, it’s more than the brand-name EpiPen cost as recently as a few years ago. But the price may also be low enough to deter others from taking on the risk and expense of developing their own generics.
Meanwhile, the company can still take advantage of some consumers’ irrational preference for brand-name drugs. How can we even think of cheaper substitutes, an anxious parent might reason, when our child’s life might be at stake?
Even before Monday, the EpiPen was a textbook case of how to exploit the emotional, political, and economic factors that shape health care spending in the United States. Mylan had bought the patent for a familiar medical treatment and jacked up the price without substantially changing it; lobbied for federal and state legislation to make its product ubiquitous in schools and elsewhere; launched an aggressive marketing campaign — complete with $1.7 million in ads during the Rio Olympics — to terrify consumers about the risk of allergic reactions; and created a coupon program that would mollify consumers concerned about soaring co-pays while still allowing Mylan to squeeze more money out of insurers.
And now the company is also poised to preempt generic rivals and profit from risk-averse consumers’ affinity for brand-name drugs. The scandal over the EpiPen ought to embarrass Bresch and her company, but all those unsolicited testimonials to the device’s life-saving capacity might just embolden them.