Mylan has effectively created a monopoly with the EpiPen.

It has little to no competition

and is a product that is needed for life or death allergy attacks. The price elasticity of demand for

the EpiPen can be characterized as inelastic.

Over the last few years Mylan has dramatically increased the price of EpiPens. To

understand how they can do this. We look at that they essentially have little to no competition.

The competition has largely left due to not having a comparable product. The convenience of the

autoinjector is what has made the EpiPen a superior product. It makes it faster and easier for

anyone to inject someone in the middle of an allergy attack.

Since Mylan has virtually no competitors they essentially own the entire industry. This

has allowed them the opportunity to raise the price of the EpiPen to astronomical prices. The

other factor is that EpiPen is not just something that consumers want its a need that can

determine if a person lives or dies. This creates a demand that will not really change due to price

increases. If you tell a parent well the EpiPen is $600.00 they are going to pay it even if they

dont have it, because their childs life depends on this product. ( Apothecary 2015)

The price of Mylan has increased and may continue to increase. Unfortunately, the

demand will stay the same since this product is a necessity for many people. Until another
competitor enters the market with a comparable product this monopoly on the market will

continue and it will continue to affect consumers.

In a monopoly market structure, the industry and the firm are one in the same. The

demand curve is downward sloping. The definition of a monopoly is the exclusive possession or

control of the supply or trade in a commodity or service. A monopolist is the single supplier of a

good or service for which there is not close substitute. The monopolist therefore is the entire

industry.

One of the factors that has allowed Mylan to have a monopoly on the industry is the lack

of competition. There closest competitors have mostly exited the market due to faulty products

and not being able to compete with the efficiency of the EpiPen. Mylan has a very well-made

product. The EpiPen is faster to inject which makes it more desirable in an allergy attack

situation.(Johnson and Ho 2016)

The second factor which has allowed Mylan to have a monopoly was EpiPen was patent

protected. The epinephrine in the pen is not patented, but what is patented is the auto-injector.

The auto-injector allows the epinephrine to be injected quickly and makes it easy for anyone to

inject it. Epi Pen became known to parents as a trusted way to combat allergy attacks. Its easy to

use and proven effective. The EpiPen has the trust of consumers to be a quality product. This
patent made it so competitors could not create a product with the same efficiency without the

autoinjector. (Johnson and Ho 2016)

The last factor is the School Access to Emergency Epinephrine Act which essentially

gave states incentives to require schools to keep emergency epinephrine. Schools by and large

adopted the EpiPen since it is known and easiest to administer. The act made it so schools would

also have to train personnel to administer the drug. This led to schools going to EpiPen. It is easy

to administer and would take the least amount of training. With EpiPens in school this gave

Mylan free marketing. Parents see it is trusted and easy to use and then also choose to buy the

EpiPen over alternatives. (Johnson and Ho 2016)

To combat high prices imposed by the pharmaceutical industry I think patents for

pharmaceutical drugs need to be more stringent as well as price controls need to be enacted. I

think unless it is the drug specifically the material to administer a drug should not be allowed to

have a patent.

Economic regulation is a form of government intervention designed to influence the

behavior of firms through price controls in natural monopolies. Social regulation applies to all

firms in an economy, and its aim is to create improved products, better work places, and lessen

pollution.
 I think since the situation with pharmaceutical drugs it becomes needed to have economic

regulations as well as social regulations. These drugs can many times mean life and death for

individuals. Prices and pharmaceutical companies should not determine who lives and who dies.
 Works Cited

Apothecary, The. "Martin Shkreli A Creature Of FDA Regulation, Not Pharma Industry's

Greed." Forbes. Forbes Magazine, 30 Sept. 2015. Web. 30 Apr. 2017.

"The New York Times Company." The New York Times. The New York Times, n.d. Web.

30 Apr. 2017.

Solomon, Yoram. "The Other Side of the EpiPen Price Hike Story." Inc.com. Inc., 24

Aug. 2016. Web. 30 Apr. 2017.

Johnson, Carolyn Y., and Catherine Ho. "How Mylan, the maker of EpiPen, became a

virtual monopoly." The Washington Post. WP Company, 25 Aug. 2016. Web. 30 Apr. 2017.