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Pharma Companies Are Spending Millions To Sustain High Drug Prices

Mylan Inc. NASDAQ:MYL - Pharma Companies Are Spending Millions To Sustain High Drug Prices

Pharmaceutical companies have been in the spotlight for quite some time now, mainly due to the price-gouging phenomenon. Mylan NV MYL became the central actor in the latest of many chapters in this scandal story, after presidential candidate Hillary Clinton and the White House publicly criticized the company for the marked increase in the price of its self-injectable epinephrine product, the EpiPen.

After much condemnation, Mylan decided to stand up for itself. In a CNBC interview aired on Thursday, CEO Heather Bresch blamed “the system” for the rise of more than 400 percent in the price of the EpiPen. It’s not greed, she added.

However, many analysts seem to disagree with Bresch, at least partially. Yes, the system is the problem, but so is greed. Moreover, the system is problematic for consumers, not pharmaceuticals, which in fact benefit enormously from it, as it allows this “cash-fat industry [to go on] routinely preying on sick people.”

California, 17 Ballot Measures And The Broader Pharma Epidemic

California voters will decide the fate of 17 ballot measures in November, including a Drug Price Relief Act, which would make prescription drugs cheaper for people in state health programs, while avoiding that the state government pays more than the U.S. Department of Veterans Affairs for drugs. While it would make more sense for Medicare, with its 55 million+ beneficiaries, to negotiate the prices, this is not an option. As one might expect, this capacity has been blocked by pharma lobbyists.

Of approximately a quarter of a billion dollars raised both for and against the California initiatives, roughly $70 million have been contributed by “deep-pocketed drug companies to defeat the state’s Drug Price Relief Act,” David Lazarus explained in an LA Times article.

This is a figure not seen in more than a decade, non-partisan money tracking organization MapLight added, according to the same LA Times piece. And, the donations could surpass $100 million by the election, AIDS Healthcare Foundation president Michael Weinstein estimated.

Moreover, it is not only donations that are helping pharmaceutical companies block the Drug Price Relief Act. On occasions, the companies have recurred to force, warning that, if the legislation were to pass, they would have to stop selling certain meds to state-controlled entities like Medi-Cal, the prison system and the California Public Employees’ Retirement System.

This article does not argue that drugmakers shouldn’t reap the profits of their efforts, but that there is a right measure for everything. However, “what Mylan and other maestros of greed show is that this is an industry that fleeces the most vulnerable members of society, and rewards itself handsomely for its morally dubious behavior,” Lazarus concluded.

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Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.

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