Column: Drug companies spend millions to keep charging high prices

Price hikes involving EpiPens, a remedy for severe allergic reactions, are in the spotlight. But that hasn't deterred the drug industry from spending millions to defeat a California measure that would limit charges for needed medications.
(AFP/Getty Images)

Pharmaceutical heavyweight Mylan, the latest poster child for drug-industry greed, finally stuck up for itself Thursday. It argued that “the system,” not avarice, was to blame for the company jacking up the price of EpiPens, a common (and life-saving) allergy remedy, by over 400%.

“Look, no one’s more frustrated than me,” Mylan Chief Executive Heather Bresch declared on CNBC.

Actually, millions of people — those with chronic medical conditions or other illnesses — are more frustrated than her.


Despite Mylan’s offer Thursday of discount coupons for some EpiPen users, the only system at work here is a cash-fat industry routinely preying on sick people. It’s a system that the drug industry will do whatever’s necessary to protect.

Of roughly $250 million raised for and against 17 ballot measures coming before California voters in November, more than a quarter of that amount — about $70 million — has been contributed by deep-pocketed drug companies to defeat the state’s Drug Price Relief Act.

Contributions aimed at killing the initiative are on track to be the most raised involving a single ballot measure since 2001, the earliest year for which online data are available, according to MapLight, a nonpartisan organization that tracks money in politics.

The Drug Price Relief Act would make prescription drugs more affordable for people in Medi-Cal and other state programs by requiring that California pay no more than what’s paid for the same drugs by the U.S. Department of Veterans Affairs. It would, in other words, protect state taxpayers from being ripped off.

Industry donations to crush the Drug Price Relief Act “will top $100 million by the election, I’m quite certain of it,” said Michael Weinstein, president of the AIDS Healthcare Foundation and a leading backer of the state measure, also known as Proposition 61. “They see this as the apocalypse for their business model.”

The drug industry already has succeeded in eviscerating Senate Bill 1010, legislation in Sacramento that would have required pharmaceutical companies to detail the costs of producing medicine and explain any price increases. The bill’s author, state Sen. Ed Hernandez (D-West Covina), pulled it from consideration last week after industry lobbyists succeeded in watering it down with business-friendly provisions.


What good is a life-saving drug if you can’t get it?

— Michael Weinstein, president of the AIDS Healthcare Foundation

The EpiPen, an important item for people with severe food allergies, has gotten a lot more expensive.

Mylan’s money-grubbing approach to EpiPens is only the latest example of a drug company mercilessly putting the squeeze on patients.

EpiPens are a decades-old way of delivering epinephrine, a hormone that counters the potentially fatal effects of severe allergic reactions to things such as bee stings and peanuts. There’s about a dollar’s worth of epinephrine in each EpiPen, to which Mylan acquired the rights in 2007 and proceeded to steadily impose double-digit price hikes.

But don’t forget Gilead Sciences charging $1,000 a pill for its hepatitis C drug Sovaldi. Or Turing Pharmaceuticals, which purchased rights to a well-established parasite drug used by AIDS and cancer patients and promptly raised the price by 5,000%.

A recent Reuters investigation found that prices for four of the nation’s top 10 drugs have more than doubled since 2011, with the remaining six jumping in price by at least 50%.


“It’s like being held hostage,” Weinstein told me. “The public’s hatred of this industry is an incredible thing. They create life-saving drugs, but, because of their greed, people can’t afford them. What good is a life-saving drug if you can’t get it?”

The Drug Price Relief Act aims to protect California taxpayers by using purchases by the VA as a yardstick by which state agencies can measure if they’re getting a reasonable deal.

It probably would make more sense if Medicare, with more than 55 million beneficiaries, served in that federal capacity rather than the VA. But Big Pharma, abetted by the industry’s Republican cronies, has consistently blocked efforts to allow Medicare to negotiate drug prices. The VA has no such constraint.

The drug industry, ambitiously, is positioning itself as a defender of California consumers. For example, industry representatives have warned that if the prices charged to state agencies were as low as what the VA pays, some drug companies might stop doing business with the likes of Medi-Cal, the prison system and the California Public Employees’ Retirement System, making certain meds unavailable.

The industry “has serious concerns about this poorly written measure because of the negative impact it will have on Californians,” said Pricilla VanderVeer, a spokeswoman for Pharmaceutical Research and Manufacturers of America, a trade group.

I asked Kathy Fairbanks, a spokeswoman for the No on 61 Campaign, if she’d characterize sky-high drug prices as a problem for patients. No, she said, that’s not how she’d put it.


“It’s an issue, how about that?” Fairbanks allowed.

“Healthcare and healthcare costs are top of mind for a lot of people,” she said. “However, Proposition 61 isn’t the answer.”

I asked Fairbanks if she was taking any prescription meds.

“No,” Fairbanks answered. “Are you?”

I told her that, as a person with Type 1 diabetes, I’ve watched helplessly as the price of insulin has tripled since 2002.

“Oh,” Fairbanks replied.

Oh indeed.

No one’s saying drug companies shouldn’t recover the costs of developing and marketing drugs, or that the industry shouldn’t enjoy reasonable profit for its efforts.

But what Mylan and other maestros of greed show us is that this is an industry that fleeces the most vulnerable members of society, and rewards itself handsomely for its morally dubious behavior. From 2007 to 2015, Mylan’s CEO — daughter of Democratic Sen. Joe Manchin of West Virginia — saw her total compensation soar from $2.5 million to $19 million, according to regulatory filings.

The Drug Price Relief Act wouldn’t force pharmaceutical companies out of business. It simply would provide a mechanism for state programs to pay something closer to fair prices for medication.

The fact that the drug industry is willing to spend as much as $100 million to keep that from happening tells you all you need to know.

David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to



When banks play unfairly, consumers want chance to be heard in court

Whistle-blowing: Insurer gets smacked for bullying employees

Deciphering your hospital bill — good luck with that