link to patent:
EpiPen Price Rise Sparks Concern for Allergy Sufferers
271–280 of 367 posts
Re: EpiPen Price Rise Sparks Concern for Allergy Sufferers
#272Earlier quoted context omitted.
Supply and demand amiright? Otherwise we might be branded as gasp socialists! There really isn't any good answer to this, and there will be losers in either scenario.
Then why are they making hundreds of thousands of epipens? Sounds like they should make like 100 a year and auction those suckers off. Less material and capital to manufacture, same profits.
doubtful that an auction that would demand those profits would be 1) easy to facilitate 2) stable and predictable.
Also, the individual price per unit would rise to the point that there would be another competitor to the market.
My point is that you can't cry about government controlled health care, and high prices of "free-market" items at the same time.
So either we have a gene pool cleansing and accept that people die, or a controlling entity uses force to coerce the manufacturers to adopt practices that will make it available at "reasonable" prices to the populous.
Re: EpiPen Price Rise Sparks Concern for Allergy Sufferers
#273Earlier quoted context omitted.
The non-trivial entry costs are there because of regulations and the legal environment regarding liability. You can view the high price as the free-market finding the intersection of supply and demand given the regulatory and legal constraints but that seems like a less than useful way of understanding 'free-market'.
> You can view the high price as the free-market finding the intersection of supply and demand given the regulatory and legal constraints but that seems like a less than useful way of understanding 'free-market'. Stop using regulation as a stalking horse for your argument. Everything you need to know about the price of epi pens you can derive from inelastic demand (people don't want to die), and barriers to entry (co…
I have a PhD in economics, and your claims about monopolies and competition aren't accurate.
Economic theory doesn't state that monopolies always arise, at least not under the circumstances you are describing. If you can buy your competitors, or make a legally binding contract to compete, the yes, monopolies are inevitable. And as you say, inelastic demand does make monopolies more likely, though your intuition that medical goods have inelastic demand may be wrong, e.g. see the RAND health care study where they randomly assign people insurance types, and find the high deductible group consume less healthcare even in emergency situations.
In the general situation, no theory guarantees that monopolies arise in the absence of regulation (apart from the above to cases which aren't the regulation you're discussing).
>Rational actors will spend up to their expected monopoly profits to create a Nash Equilibrium where new entrants into a market will be unprofitable.
In economics, anything that relies solely on Nash Equilibrium is doubtful. In most situations, Nash Equilbria are not unique, and therefore it's hard to say what will actually happen. If the Nash Equilibrium is unique, usually some stronger equilibrium concept applies like dominant strategy equilibrium.
In your case it would be more accurate to say that committing to drive out potential competitors can be a Nash Equilibrium for some parameters.
Re: EpiPen Price Rise Sparks Concern for Allergy Sufferers
#274Since Sanofi previously had an equivalent product on the market for at least 3 years (called Auvi-Q), I'm really curious - why were people paying up for an Epi-pen? Was it the brand name? Do schools mandate it's an Epi-pen?
I know Sanofi pulled the product in October of last year, but it seems like Mylan has been raising prices during that time.
Re: EpiPen Price Rise Sparks Concern for Allergy Sufferers
#275Someone might reasonably wonder why a federal task force is required to investigate "price gouging" for an item that contains under $10 of materials and is not mechanically complex. Why wouldn't an entrepreneur simply introduce a competing epi-pen design and bring it to market for $300 (for example) and undercut the price being charged by Mylan? We're told to hate the Martin Shkrelis of the world, and to resend the M…
But to be clear, it was the established firms that designed the system to protect established firms.
Re: EpiPen Price Rise Sparks Concern for Allergy Sufferers
#276Since Sanofi previously had an equivalent product on the market for at least 3 years (called Auvi-Q), I'm really curious - why were people paying up for an Epi-pen? Was it the brand name? Do schools mandate it's an Epi-pen? I know Sanofi pulled the product in October of last year, but it seems like Mylan has been raising prices during that time.
They seem to have some manufacturing trouble, leading to a recall[0] and pulling the product from the market. They mention Epi-Pen and Adrenaclick[1] as alternatives.
[0]https://www.auvi-q.com/recall-faqs [1]http://www.goodrx.com/adrenaclick
Re: EpiPen Price Rise Sparks Concern for Allergy Sufferers
#277Someone might reasonably wonder why a federal task force is required to investigate "price gouging" for an item that contains under $10 of materials and is not mechanically complex. Why wouldn't an entrepreneur simply introduce a competing epi-pen design and bring it to market for $300 (for example) and undercut the price being charged by Mylan? We're told to hate the Martin Shkrelis of the world, and to resend the M…
For anyone as confused as I was, I'm presuming that, Michael Skakels=Martin Shkreli?
Re: EpiPen Price Rise Sparks Concern for Allergy Sufferers
#278Earlier quoted context omitted.
You know what's weird about this situation is that often I've been told by people here in the US that the price NHS and other single payer systems pay is only possible because we here in the US supposedly pay for it at the free market price. I don't believe that myself since it wouldn't make much sense to say that the prices would plummet to such a degree as to be unprofitable. But I do wonder how much of the price w…
It is possible that both can be true. The price for medicine is cheaper because you have a single entity, the NHS, negotiating for a large group of people. On the the other hand, it is possible that we subsidize the development of new medicine to an extent. An epipen would otherwise exist regardless because it is a requirement for many people. More advanced medicine that requires a large capital investment for resear…
> The price for medicine is cheaper because you have a single entity, the NHS, negotiating for a large group of people.
Wellpoint and its subsidiaries insure more than 70 million people, which is slightly more than the current population of the UK.
https://www.thebalance.com/the-big-five-health-insurance-com...
Re: EpiPen Price Rise Sparks Concern for Allergy Sufferers
#279Earlier quoted context omitted.
Making a company's customers upset tends to have teeth. There's a reason companies spend money on PR instead of just keeping that money as additional profit, after all. If your neighbor is being a nuisance, it may be more effective to gather up some of the other neighbors and all go over to the fellow and tell him to knock it off. I don't have any actual solutions to propose here. Maybe it merits legislation, maybe i…
Gathering a group of neighbors and telling him to knock it off doesn't have any teeth either, I'm afraid. He can still say "screw you, I'm not breaking any laws, so you can't do anything to stop me." I do agree about upset customers having teeth. That's exactly how a free market operates. If they're upset enough, they'll stop buying the product and look for alternatives. Except there aren't any suitable alternatives…
Yes, your neighbor can just ignore you, but he usually won't. Social pressure tends to work. That's just as true of companies as it is for bad neighbors. If your argument is merely that it might not work, then we're completely in agreement.
Re: EpiPen Price Rise Sparks Concern for Allergy Sufferers
#280Someone might reasonably wonder why a federal task force is required to investigate "price gouging" for an item that contains under $10 of materials and is not mechanically complex. Why wouldn't an entrepreneur simply introduce a competing epi-pen design and bring it to market for $300 (for example) and undercut the price being charged by Mylan? We're told to hate the Martin Shkrelis of the world, and to resend the M…
The government has created a moat for the current pen through regulation, particularly the extensive testing needed to bring it to market as a medical device whom people's lives depend on it delivering the right dosage with a low failure rate.
This creates something of a small granted monopoly.
It makes sense for the government to step in when something goes wrong.
There are lots of theoretical arguments for a freer market that may drain that moat and allow competitors to quickly react to gouging but the reality is that consumers don't have a great way to test things like epipens and a market trial and error approach seems a little barbaric.