Leave it to our own Democrat Senator Sheldon Whitehouse to weigh in on the recent price increase of the EpiPen in a way that is both blindingly insidious and enlightening:
The sky-rocketing cost increase of the EpiPen is just the latest evidence that our regulation of prescription drug pricing is broken. (The) system is rigged by the pharmaceutical industry to allow this price-gouging, and that is what needs to be corrected.
Drug pricing doesn’t have to be regulated; it’s regulation of drug production that’s the problem. Everybody from The Guardian to the Wall Street Journal knows that the pricing of the EpiPen is made possible by the government’s enabling of Mylan’s “near monopoly” (as Whitehouse and other senators characterize the company). A Wall Street Journal editorial explains:
… the steady Mylan rise is hard to read as anything other than inevitable when a billion-dollar market is cornered by one supplier. Epinephrine is a basic and super-cheap medicine, and the EpiPen auto-injector device has been around since the 1970s.
Thus EpiPen should be open to generic competition, which cuts prices dramatically for most other old medicines. Competitors have been trying for years to challenge Mylan’s EpiPen franchise with low-cost alternatives—only to become entangled in the Food and Drug Administration’s regulatory afflatus.
Of course, when I write “everybody,” I’m limiting my set to those who are modestly well informed. A little economic understanding helps, too. Let me repeat something I write regularly: Prices are measurements of value. If a price goes up a great deal, especially if it does so quickly, that means people want more of the product than they’re able to get, and it’s a signal to other producers that they should enter the market, even at great expense.
Immediately after a devastating hurricane, it may seem predatory for people with chainsaws and water bottles to charge super-high prices, but their doing so not only forces affected families to weigh the value of the assistance, but also sends a signal far and wide that it’s worth people’s time to invest in tools, supplies, and gasoline and travel to the affected spot. Of course, as a moral matter, we should all approach such situations in a spirit of charity, but by the same principle, we shouldn’t stroke our own moral vanity by insisting that only those with the right intentions can help.
In the case of pharmaceutical gouging, the focus of Congress should really be on creating laws that require smarter, lighter handed, less capricious regulation and therefore allow more companies to offer comparable products at competitive prices. Unfortunately, it’s so much more profitable for progressive politicians to empower unaccountable bureaucracies to manipulate the market and create “near monopolies” that make the politicians’ corporate friends and donors rich and allow the politicians to posture in meaningless poses while grabbing more power to repeat the process.