A Missouri law professor thinks Congress should consider imposing price controls on certain drugs after the EpiPen controversy.
Mylan, the pharmaceutical company that provides the life saving pen which treats allergic reactions, announced it would sell a cheaper $300 version of the device after strong reaction to price increases.
U.S. Senator Claire McCaskill (D – Missouri) joined a colleague to send a letter to the company asking why the cost of EpiPen has risen nearly 500 percent over five years.
Rachel Sachs of the Washington University School of Law in St. Louis thinks price controls are one way to prevent spiraling cost hikes. “Now that would have effects that we would want to know about” said Sachs. “Would companies price more highly to begin with because they know that they can’t increase the prices to the same extent later on? Possibly. But it might be better than the current situation.”
She notes there’s a stigma attached to “price controls”. “The term ‘price controls’ is often used as a sort of bogey man, that anything that is a price control is necessarily bad for innovation, and therefore bad for society. I don’t think it’s that simple. I think there are ways of doing this that encourage different kinds of innovation, or that promote access many years in the future.”
Sachs says she doesn’t currently have enough information to know what effect price controls would have on the industry. “These are questions where you’d want either a legislative body or an administrative agency to gather a lot of information, and to decide, would this be a good thing to do?’.
Sachs argues there are a lot of statutes already in law that can be categorized as price controls.
Epipen rose from about $165 in 2011 to more than $600 this year after the number of companies offering the treatment dramatically shrunk.
Sachs thinks Congress could enact measures such as those taken within Medicaid to prevent price increases over time. She also thinks there might be less resistance to government imposed price controls if they were specifically aimed at generic drugs.
Ultimately, Sachs says more action needs to be taken than expressions of outrage over the cost hikes, because another problem similar to the EpiPen controversy will pop-up if nothing is done.