A Manchin of Corruption

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corruption

When a person experiences a severe life threatening allergic reaction (Anaphylaxis), they may die from two pathologies. All of the airways from their trachea to their smallest bronchioles constrict progressively until no air can pass through them and their blood vessels dilate, causing blood pressure to plummet and blood to leak out of their vasculature. Their lives could be at risk from corruption.

There happens to be a medication that works extremely well to treat both of those life-threatening pathologies: Epinephrine. Epinephrine (Adrenaline) is produced by adrenal glands in mammals, but during anaphylaxis, not enough of it is released to combat the life-threatening emergency. Doctors discovered that they could inject a larger dose of epinephrine into a patient’s vein or muscle and quickly and effectively save their life during anaphylaxis.

Over the last few decades, multiple companies have developed Epinephrine auto-injectors, devices that deliver 0.3mg (the standard dose for anaphylaxis) into a person’s muscle when a spring-powered needle is activated by pressing the device against a hard object. This device is easy for young children with severe allergies to learn how to use. In a truly free market/country, the free competition between companies would give the American people plenty of options to choose among cheap and effective Epinephrine auto-injectors. So, why have you only ever heard of the EpiPen, and not Adrenaclick, Twinject, or Auvi-Q?

The answer is that the corrupt government officials who we vote for often pick winners. Or, more specifically, a governor helped his daughter’s company while hurting competitors. Because of the FDA and other massively complex government restrictions, no company can sell anything that may be considered a medication without the federal government approving it. Besides the FDA, the government can also pick winners and losers through government contracts. When the federal government regulates/controls large entities like the Department of Education, the military, and the VA hospitals, they must buy products in bulk from someone, so why wouldn’t they buy from their friends?

This House of Cards-like story of corruption begins in West Virginia, about a decade ago. In 2007, Gayle Manchin was appointed to the West Virginia Board of Education by her husband, Governor Joe Manchin. This position would ultimately spring-board her to become Vice President and, eventually President, of the National Association of State Boards of Education in 2012. This was five years after their daughter Heather Bresch took over as CEO of Mylan, the manufacturer of the EpiPen. Gayle Manchin served two terms as the Board of Education’s vice president. In 2013, she was elected President of the West Virginia Board of Education for a two-year term

In 2012, Mylan did have the largest market share of Epinephrine auto-injectors, but there were other companies producing them. This meant that they had to keep their prices competitive. At this point, a pack of 2 EpiPens sold for $208. As Mylan and the Manchins used government to bully their competitors out of the market, they were able to progressively raise the price of the EpiPen. By 2016 when the story broke of the price hikes, a pack of 2 EpiPens was listed at $608.

While this was going on, Bresch was increasing her salary by millions. Her salary when she became COO in 2007 was 2.5 million dollars a year. By the time the story broke in 2016, she was paying herself 19 million dollars a year as CEO (I thought that Democrats believed that a wage gap was unfair and that, to quote President Obama, “I do think at a certain point you’ve made enough money”).

Making the hypocrisy even sweeter, in 2014 Mylan’s CEO successfully asserted that the company’s headquarters is located in the Netherlands, despite its headquarters being based in Pittsburgh allowing them to escape the US’s 39% corporate tax, instead enjoying the Dutch corporate tax that sits at around 25%. This practice is condemned by Democrats/big-government types, including President Obama and Bresch’s own father, Senator Joe Manchin. Making this story more ironic is that in 2011 Esquire Magazine named Heather Bresch “Patriot of the Year” in 2011, according to bizjournals.com.

How did Mylan bully their competition? In 2015, the FDA announced that Sanofi was voluntarily recalling all of their Epinephrine auto-injectors, called the Auvi-Q. The recall included all adult doses and pediatric doses expiring between March and December of 2016, including those sold to consumers, retailers, and hospitals alike. Sanofi stopped producing the Auvi-Q a few months later, and their license for the Auvi-Q was returned to Kaleo.

Why were they recalled? According to the FDA website, “As of October 26, 2015, Sanofi has received 26 reports of suspected device malfunctions in the US and Canada. None of these device malfunction reports have been confirmed. In these reports, patients have described symptoms of the underlying hypersensitivity reaction. No fatal outcomes have been reported among these cases.”

You can draw your own conclusions regarding what influenced Sanofi to recall their auto-injector. OneSpotAllergy.com believes that this far-reaching recall for such an unsubstantiated issue was unprecedented and highly likely involved foul play. Conveniently, in 2013, President Obama signed the “EpiPen Law” into effect, giving public schools in the US funding preferences if they were to stock Mylan’s product in their nurse’s office. Perhaps as an insurance policy set to begin in January of 2017, Mylan donated over $100,000 to the Clinton Foundation.

As mentioned earlier, Kaleo took back its license for the Auvi-Q when Sanofi went under, and is now selling the Auvi-Q, which distinguishes itself from the EpiPen by featuring a more sleek design that fits better in pockets and by containing a voice chip that guides the user to deliver the intramuscular injection with voice prompts. It also administers the medication in five seconds, which is half of the time it takes for the EpiPen. Kaleo also produced Naloxone auto-injectors marketed as Evzio using the same technology. Since being approved by the FDA in April 2014, they have been giving them to areas that are especially plagued by opiate overdose deaths, like Charleston and Cabbel-Huntington in West Virginia, despite the list price being $2,700 for a pack of two.

In 2015, GoodRx began to sell a generic Adrenaclick for $110 for a pack of two. None of this would be possible of course without the FDA (and other federal government agencies) possessing the power to pick winners and losers. Indeed, the FDA harms the lives of Americans who are affected by the healthcare system, which is essentially all of us.

As confirmed by OpenSecrets.org, Mylan spent a million dollars lobbying against a US Senate bill that would have allowed doctors who prescribe their patients EpiPens (many doctors are unaware that there are cheaper alternatives) to buy any Epinephrine 0.3mg auto-injector from their pharmacy. The bill was defeated. EpiPen is currently the only medication in the US with this government-provided monopoly. Additionally, it is more difficult for patients to buy an alternative to the EpiPen, because it is classified by the FDA as both a drug and a medical device.

Epinephrine auto-injectors would not be such a commodity if the government did not forbid people from buying 1mg vials of Epinephrine (which sell for $5) and drawing up the medication in a syringe and delivering the 0.3mg dose to an anaphylaxis victim. Children have been doing this for decades with insulin to treat their Diabetes Mellitus.

And we the people pay the FDA over 4 billion dollars a year to do this to us.

In a free market, companies should be free to sell their products at any price they desire. As free consumers, we would be free to buy our products wherever we choose to. However, it is unethical and illegal to use government to manipulate the market in an individual’s favor. So, the next time you hear someone blame capitalism for an issue, ask them to make sure that the issue at hand was not in fact caused by government intervention.

What’s the solution?

A good start would be abolishing the FDA. Before you yell “Anarchy!” keep in mind that this would give the FDA’s duties and funding back to the individual states. The worst case scenario is that we save $4,000,000,000 dollars a year and we would give people the liberty to buy and sell any food and drugs they wish. All items previously regulated by the FDA would also drastically decrease in price due to the decrease of expensive regulations. Often better than an inefficient government agency is an accountable watchdog group or reviewing platform like Yelp or Google Maps reviews.

Is there any argument to be made for keeping the FDA?

* Elliot Axelman was born in Baltimore, Maryland to orthodox Jewish parents, and has since become agnostic. He currently works as a paramedic in New York City and its surrounding counties. He is a constitutional libertarian and an athlete who enjoys MMA, football, powerlifting, parkour, and anything else that can challenge him physically.

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