WashU Expert: EpiPen controversy highlights need for price controls

Mylan, the company that manufactures the life saving EpiPen device, has, amid strong national reaction to high prices, announced it will begin selling a generic version for $300, half the cost of the regular priced two-pack.

Recent scandals involving high-priced generic drugs should prompt us to consider price controls for pharmaceutical companies, says an expert on the health care industry at the School of Law at Washington University in St. Louis.

Rachel Sachs

“We should not think of ‘price controls’ as a four-letter word,” said Rachel Sachs, associate professor of law and an expert on drug regulation and health law.

“Price controls come in many forms, and we have many of them operating in the law right now,” she said. “We could act to prevent price increases over time, a step that has been taken in Medicaid already. We could nudge providers to care about prices through projects like the proposed Part B demo. Giving Medicare both negotiating authority and formulary-setting power would qualify as ‘price controls,’ in my view.”

Sachs said her real concern is that we “seemingly lack the political stomach to do anything about the set of high drug prices that are problematic, to the extent we can agree on that set.

“We have no shortage of proposals, even if I’m skeptical of some,” she said. “Public shaming seems effective, but publicly shaming individual manufacturers won’t change the underlying dynamics. We could start by providing information, as with some of the recent price/cost transparency bills or with the work done by groups like the Institute for Clinical and Economic Review.”

What would the effect on future innovation be from a law that imposed some sort of price control, either directly or by creating formulary pressure in different ways?

“I understand the considerations involved here,” Sachs said. “But the outrage over actions like Mylan’s must come with a prescription for change. If not, it is a matter of when, not if, this will happen again.”

Read Sachs’ full take on the situation at the Harvard Law Bill of Health blog.

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