Introduction Over the years, the EpiPen price increase has been a major concern among median income households and insurance companies. The price increase for EpiPens has resulted in a decrease in demand due to families taking drastic measures to compensate for the price surge. Since Mylan acquired the EpiPen in 2007, the cost to purchase the medicine has increase from $100 for a pack of two to $600 for the same amount (Ramsey, L. 2016). Epinephrine, the drug that is in the EpiPen, costs about $1 a dose. It’s the delivery system that demands the outrageous price hike. EpiPen’s main competitor, Auvi-Q, competed with Mylan to see who could charge the highest price for the same product. From May 2013, through October 2015, EpiPen and Auvi-Q
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For the commercially insured, Express Scripts were able to keep their co-pay costs steady, seeing a rise of $0.45 from January 2015 to July 2016 even though the price of the EpiPen rose 51% (Herper, M 2016). While Mylan offers coupons to help reduce the cost of the medicine, most consumers will not see savings due to them not hitting their deductible because they do not have a co-pay on drug purchases (Herper, M. 2016). Eventually, there will be generic versions of the EpiPen that will drive down prices. This paper is intended to show how the price increase affects the economy.
The first section of this paper will show the supply and demand of the EpiPen in the past and how it has changed due to the price increase. The second section describes the oligopolies, specifically EpiPen and AuviQ. Lastly, will be the conclusion that draws upon real world data and conclusive …show more content…
The initial demand for the EpiPen is D1, and the supply of the EpiPen is S1. P1 is the price for supply and demand during market equilibrium. Since the demand for EpiPen has decreased the demand curve shifts inwards from D1 to D2. Assuming everything remains constant, the decrease in demand caused the price for the EpiPen to increase from P1 to P2.
Figure 1
Due to the lack of competition, no cap on drug prices, and the decrease in demand, calls for the price increase for EpiPens. Hospitals and consumers have resorted to using unconventional methods in administering Epinephrine by buying vials of the medication and using syringes to inject the medicine (Ramsey, L. 2016). Not only are they purchasing vials of Epinephrine, consumers are keeping expired EpiPens hoping that it will still provide the same effect as new EpiPens. In order for the EpiPen demand to increase, consumers must be able to afford the product as well as have the ability to afford the medication. Now that Mylan is under scrutiny from increasing the prices of the EpiPen, Mylan upped their discount coupon from $100 to $300 and expanded the number of consumers eligible to receive free EpiPens (Skinner, G.
For the commercially insured, Express Scripts were able to keep their co-pay costs steady, seeing a rise of $0.45 from January 2015 to July 2016 even though the price of the EpiPen rose 51% (Herper, M 2016). While Mylan offers coupons to help reduce the cost of the medicine, most consumers will not see savings due to them not hitting their deductible because they do not have a co-pay on drug purchases (Herper, M. 2016). Eventually, there will be generic versions of the EpiPen that will drive down prices. This paper is intended to show how the price increase affects the economy.
The first section of this paper will show the supply and demand of the EpiPen in the past and how it has changed due to the price increase. The second section describes the oligopolies, specifically EpiPen and AuviQ. Lastly, will be the conclusion that draws upon real world data and conclusive …show more content…
The initial demand for the EpiPen is D1, and the supply of the EpiPen is S1. P1 is the price for supply and demand during market equilibrium. Since the demand for EpiPen has decreased the demand curve shifts inwards from D1 to D2. Assuming everything remains constant, the decrease in demand caused the price for the EpiPen to increase from P1 to P2.
Figure 1
Due to the lack of competition, no cap on drug prices, and the decrease in demand, calls for the price increase for EpiPens. Hospitals and consumers have resorted to using unconventional methods in administering Epinephrine by buying vials of the medication and using syringes to inject the medicine (Ramsey, L. 2016). Not only are they purchasing vials of Epinephrine, consumers are keeping expired EpiPens hoping that it will still provide the same effect as new EpiPens. In order for the EpiPen demand to increase, consumers must be able to afford the product as well as have the ability to afford the medication. Now that Mylan is under scrutiny from increasing the prices of the EpiPen, Mylan upped their discount coupon from $100 to $300 and expanded the number of consumers eligible to receive free EpiPens (Skinner, G.