Angry about high-priced EpiPens? Blame cronyism and overregulation
Acton Institute Powerblog

Angry about high-priced EpiPens? Blame cronyism and overregulation

epipen22Pharmaceutical company Mylan recently spurred a flurry of outrage after raising the price of their lifesaving EpiPen by 400%, leading many to decry “corporate greed” and point the finger at capitalism.

Unfortunately, such anger routinely fails to consider the systemic reasons as to why Mylan can charge such prices, resorting instead to knee-jerk calls for fresh tricks by the FDA and new layers of price-fixing tomfoolery from Washington.

Yet the problem, as detailed by Rep. Mick Mulvaney in a new video from FEE, begins with the very same interventions, back-room deals, and price manipulations that the critics now propose.

Why, we might ask, is Mylan able to wield this monopolistic power and exploit its consumers with little challenge? As Mulvaney demonstrates, the answer has far more to do with the FDA, Congress, President Obama, and the Affordable Care Act than a free market with free-flowing prices.

This is not an isolated incident. As Jay Stooksberry explains, even in this one small corner of healthcare, the connections between government regulators and healthcare policy reveal a trail of breadcrumbs that leads to far more “pay to play” cronyist schemes than Mylan and its EpiPen:

The EpiPen is not a microcosm; the cost of other prescription drugs are also on the rise. A House of Representatives report found that ten different drugs experienced even larger price hikes, starting as low as 420% and as high as 8,000%.

Those companies who “paid to play” are providing a textbook example of crony capitalism, not free market capitalism.

Considering the scope of government intervention in this specific marketplace, rather than blaming the free market for this controversy, a more appropriate response would be “what free market?” And now, lawmakers are ironically “demanding answers” from Mylan. If forced to speak in front of a Congressional panel and asked what inspired this price hike, Bresch and company should be encouraged to hold up a mirror to lawmakers’ faces.

As we hold up that mirror to Washington, Mulvaney’s point about prices ought not be forgotten. The core problem is not whether a company is charging too much or too little for a drug. “Nobody in here has any clue,” Mulvaney says. “We don’t understand the cost. We don’t understand the distribution system. We don’t understand how healthcare products get priced and distributed.”

Rather than trusting in the power of bottom-up creativity and strengthening the channels through which we collaborate and exchange, the planners prefer to engage in new forms of top-down experimentation, all under the guise of “economic security” and “public health.”

All the while, the problem is not high prices and the solution is not self-righteous rants about “corporate greed” paired with economic control. The problem is overregulation and an entrenched plutocracy, and the answer is found in freedom and the fruits that it provides.

Joseph Sunde
