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Silicon Valley engineers: EpiPen only costs $8 to make despite selling for $700


A team of engineers in Silicon Valley has determined that Mylan Pharmaceuticals’ EpiPen, which costs $700 in stores, costs less than $10 to make.

Inventor and entrepreneur Bob Wallace teamed up with manufacturing and tooling consultant Roland Krevitt to deconstruct the EpiPen and figure out what the emergency epinephrine injector costs to actually make, piece by piece. Wallace and Krevitt released their findings to the San Jose Mercury News, revealing that the total cost to make two EpiPens, from the 0.3 milligrams of the medicine, to the needle, to the syringe, and even the packaging itself, was just $8.02.

“This is not rocket science,” Wallace told the Mercury News. “People should be aware of what they’re getting hooked for.”

Wallace and Krevit scientifically reverse-engineered a two-pack of EpiPens to come up with precisely how much each item that makes up the EpiPen costs, weighing each piece individually and went by industry standards to calculate manufacturing costs. While their final estimate was $8.02, Wallace and Krevit got the cost down to just $6.90 if the cost of the box, plastic trainer pen, pen clamp, and instruction manual in order to manufacture two EpiPens. Even after adding a 25 percent padding to the cost in case he and Wallace missed something, the team found that two EpiPens still cost just $10 to make.

“Talk about sleight of hand,” Krevitt told the Mercury News. “These guys put a magician to shame.”

Currently, customers can expect to pay roughly $733 at a CVS pharmacy for a two-pack of the emergency epinephrine injectors, which are used to combat potentially life-threatening allergic reactions, primarily by those with food allergies. After acquiring the rights to the EpiPen in 2007, Mylan proceeded to jack the price of the life-saving drug up by over 460 percent in a nine-year period. In that same period of time, Mylan CEO Heather Bresch saw her own salary increase by 671 percent, shooting up from just under $2.5 million annually almost $19 million.

After a wave of outrage rocked Mylan — which tanked its stock price by approximately $3 billion in under one week — the embattled drug company offered a coupon to certain patients who qualified. While Mylan never technically lowered the price of the EpiPen, it did increase copay assistance from $100 per pack to $300 per pack to patients covered by commercial health insurers.

In defending the cost of the EpiPen to Congress, Bresch said the company pays a little under $70 per two-pack to Pfizer subsidiary Meridian Medical Technologies, which actually manufactures the medical devices. Bresch also said that $334 of the cost for a two-pack goes to the insurer covering the patient buying it, the wholesaler that stocks it, and the pharmacy that sells it, suggesting that Mylan’s profit margin is $274 for a two-pack.

Action group The Other 98% is petitioning Mylan to drop the price of the life-saving EpiPen. As of this writing, it has over 222,000 signatures. Click here to sign.

 

Tom Cahill is a writer for US Uncut based in the Pacific Northwest. He specializes in coverage of political, economic, and environmental news. You can contact him via email at [email protected], or friend him on Facebook.



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