​EpiPen Controversy: the Economic Struggle of Human Need Versus Greed

EpiPens save lives by instantly delivering a preloaded dose of epinephrine to those suffering from a severe allergic reaction known as anaphylaxis.  Awareness about the dangers of anaphylaxis and the importance of treating severe allergic reactions as quickly as possible can also help save lives by increasing access to devices like EpiPens.  A $600 plus price tag for a double pack of EpiPens, however, quickly erases the health benefits of such marketing strategies by restricting access based on cost.  Experiencing a 500% increase in price since 2007 under new owner Maylan, the EpiPen Controversy epitomizes the economic struggle to provide for human needs and contain the human impulse to seek excess.
 
Although an EpiPen contains approximately $1 worth of epinephrine, Maylan CEO Heather Bresch has justified a $100 profit per set as reasonable.  She has also justified the need to invest up to $105 per EpiPen set into “awareness” marketing.  Thanks to Maylan’s “awareness” marketing, as well as discounts and giveaways, schools in most States stock EpiPens, which expire after 6 to 12 months with few viable alternatives available. Maylan is also pushing for legislation to force airlines to stock EpiPens.  To boot, Maylan is lobbying Congress and the health insurance industry to eliminate co-pays for EpiPens in order to hide the extreme cost of EpiPens, thereby using government policy and insurance companies to short-circuit cost-cutting market forces.

Drawing on the EpiPen as an analogy for the broader healthcare industry, there is a need to provide healthcare at an affordable and sustainable price.   The economy exists solely to provide for the needs of People while the economy relies on profit to encourage innovation and improved efficiency.   What creates costs in any given sector of the economy is the need for profits. What further adds extra costs are layers of for-profit bureaucracy.  The problem with profit is that too much profit becomes little more than an added cost that can limit access to necessities instead of driving supply increases and efficiency improvements.  This no more apparent than when it comes to industries that provide for fundamental human needs.  
 
Health insurance, for example, exists to pull reserves of capital together, coordinate care, and allocate funds in a more efficient matter. Anything outside of these functions leads to waste as well as unnecessary denial of care, a.k.a. healthcare rationing for the sake of profits. Administrating healthcare and fees for service adds costs that can only be justified when enough savings are realized to more than pay for the service and the overall healthcare system is improved.   Consequently, a healthcare system driven by increased profits for bureaucrats, such as insurance providers and pharmaceutical executives, cannot lead to greater innovation or improved care.
 
Profit drives innovation and expansion when it attracts investments in terms of financial assets, human capital, and the pursuit of novel thinking. Offering satisfactory services to patients and caregivers is one way of using profits to accomplish this goal. Building hospitals and expanding facilities with advanced technology is another. Rewarding pharmaceutical executives and administrators of health insurance plans with large salaries and bonuses is not.   In today's system, the healthcare industry adds costs by exacting enormous profits while cutting access to those most in need of care. This is not improved efficiency under any definition of the term.
 
From doctors to bandages, the costs of treating even a healthy person mount very quickly. How resources are utilized can be drastically improved through innovation as well as better management of care. The improved utilization of medical recourses would help make medical care more affordable and improve access.  Unfortunately, it is far easier to decrease demand for services; i.e. raise price and decrease access.  Unfortunately, the economic reality is that healthcare is more of a discretionary necessity than our society would like to admit.  When the cost of food is high, people must pay it, but the high cost of healthcare pushes people away.  This also why people and governments push for lower food prices, yet perpetuate higher medical costs.
 
In October of 2010, a Tennessee home was allowed to burn to the ground.  The local fire department waited for the fire to spread to the next house before they stepped up to extinguish the new blaze.  The owners of the first home had not paid their membership fee to this for-pay fire department. Not only did this $75 lapse for a service fee cost these people their home, it endangered their lives and nearby homes. Just as fire and police are necessary emergency services, so are most medical services. The profit driven, versus service driven, model of the healthcare system in the US has dire consequences to individuals and the communities in which they live, especially considering the increasingly cost-prohibitive nature of healthcare.