Manipulating the Prescription Drug Market: Spiking Prices, Inducing Demand, and Costs to the Public

In 2016, Mylan made headlines when it spiked the price of its EpiPen AutoInjector by 400%, raising the price from an average of $57 to $500. Critics called the price hike “outrageous, “brutal” and “corrupt.” Public outcries fueled a demand for a Congressional investigation, and Mylan negotiated a settlement with the United States Department of Justice over alleged violations of the False Claims Act. Although competition self-corrected and similar products entered the marketplace, this case – and other similar cases involving generic drugs and insulin – highlighted the skyrocketing costs of prescription drugs in the United States. In 2019, United States outpatient spending on prescription drugs totaled $369.7 billion. Despite massive expenditures, the United States ranks below comparable countries on health outcomes. This article traces the reasons for high medication prices; describes two key lawsuits alleging patterns of anticompetitive pricing, collusion, and fraud; and analyzes how corporate practices contribute to unnecessary and harmful healthcare costs through the pharmacological imperative. Industry practices described in this article reflect a pattern of organizational business ethics that contravenes market guardrails through both alleged and admitted dishonesty and illegal conduct. This article proposes solutions that will improve patient health, reduce healthcare costs, and uphold market fairness by reforming the expectations of corporate conduct