Epipen Case Study Pricing Strategy

In the pharmaceutical industry, marketplace competition is the only thing that can keep prices in check. This presents a problem for Americans who need to buy from a brand that has essentially monopolized the market of a certain medicine. For instance, over the past eight years, the price of a commonly used medical device, the EpiPen, has been steadily increasing. The EpiPen is an epinephrine auto-injector used to treat severe allergic reactions and anaphylactic shock (Varandani); anaphylactic shock is “a severe, potentially life-threatening allergic reaction that occurs within seconds or minutes of exposure to an allergen” (Mayo). A potentially life-saving device should not be a financial burden on the people who need it; yet, a pack of two …show more content…
If regulated and employed correctly, this plan could generate a wider consumer market for the EpiPens, and consumers would not be barred from purchasing the item due to a high price tag. In this system, if a person has low income, the price of the EpiPen would be relatively low. A person with moderate reactions and excessively high income would pay a relatively high price. Then everyone else would have a to pay a median price dependent on the evaluation of their health needs. Every few years when a new pen is bought, each person must be reevaluated by a doctor to ensure that they are still in the same position medically along that sliding scale. Then everyone who needs an EpiPen can get access to them. This evaluation-based distribution is similar to Oregon’s system for its Medicaid patients: “a long list of medical procedures, ranked in terms of their cost/benefit ratio, determines the reimbursement policy” (Jonsen). Nonetheless, this type of system is easily corruptible because it can be subjective; the overall price of the pens can be skewed for or against a person depending on a multitude of different factors, such as who might be ranking that person’s need, or, in Oregon’s case, their cost/benefit