One of the age-old worries that consumers have faced and continue to face is over-dependence on a supplier that leads later to a ratcheting up of the price you pay for their products.
That has afflicted thousands of users of a treatment for severe allergic reactions.
Plenty of patients felt an uncomfortable itch on Tuesday after drugmaker Mylan (NASDAQ:MYL) came under fire for sharply increasing the price of its life-saving EpiPen devices used by people to treat severe allergic reactions.
Senate Judiciary Committee Chairman Chuck Grassley has written to Mylan CEO Heather Bresch asking for an explanation, and committee member Sen. Amy Klobuchar urged the Federal Trade Commission to investigate the price hikes.
Mylan's EpiPen, which counteracts the allergic reaction known as anaphylaxis, has seen a more than five-fold price increase since 2008, with some customers paying more than $600 for a pack of two of the auto-injection devices this month.
Wells Fargo senior analyst David Maris has charted a price history for EpiPen which notes that in April 2001, the price of an EpiPen package was $75.80. The device then had a series of 3% and 4% price increases until 2008, when it was acquired by Mylan.
Mylan kept the price increases to just 5% in 2008 and early 2009, but in October 2009 it raised the price by 20%. Then, over the next four years, Mylan raised EpiPen's price by 10% eight separate times.
In November 2013, Mylan hiked EpiPen's price by 15%, and then did so five more times through May of this year.
As of Tuesday, a pack of two EpiPen auto-injectors was selling for $614.07 through a membership warehouse with a free coupon that patients had to download, according to the GoodRx online drug price comparison website. The price was $616 with a coupon at Kroger Pharmacy (NYSE:KR), $630.96 at Target (NYSE:TGT) and $633.66 at Walgreens Boots (NASDAQ:WBA).
But it transpires that the price hikes of EpiPen are only the tip of the, pen.
Mylan is also accused of having sharply raised the prices of a slew of other drugs this year. In fact, the tally is a hike of more than 20% on 24 products, and more than 100% on seven products.
They include a stunning 542% increase for the drug ursodiol, which is a generic medication used to treat gallstones.
The price of one of Mylan's biggest selling generics, tolterodine, was increased by 56 percent this year.
Meanwhile, CEO Bresch’s remuneration hasn’t stood idly by when this has happened. The chief of the Dutch-based company has seen her compensation rocket around 700% between 2007 and 2015.
It takes a lot to get lawmakers this wound up about price hikes or other issues in the pharma sector. In 2015 two drugs companies faced Congressional pressure.
One was Valeant (NYSE:VRX), whose stock price was pummelled for months after The New York Times reported that Valeant and other firms were using a network of specialty pharmacies to sustain sales of high-priced drugs and prevent patients and insurers from switching to less-expensive generic competitors.
The other was private company Turing Pharmaceuticals, whose then-CEO Martin Shkreli raised the price of the anti-parasitic medication Daraprim by more than 5,000 percent. Shkreli was indicted late last year on federal securities charges that are unrelated to the Daraprim controversy.
So now it is the turn of Mylan. There will be questions a plenty for the company. But more intriguing will be the answers.
Mylan shares were down 4.7% at $45.64.