One example of a product that has become ridiculously expensive is the EpiPen, an auto-injector used to administer epinephrine in case of severe allergic reactions (anaphylaxis). The EpiPen's price hike received significant attention in the United States over the years.
Several factors contributed to the skyrocketing price of the EpiPen:
Lack of competition: Mylan Pharmaceuticals, the company that manufactured the EpiPen, held a virtual monopoly on the auto-injector market for a long time. This lack of competition allowed them to set higher prices without fear of losing customers to a cheaper alternative.
Limited alternatives: At the time of the price increase, there were limited alternative products available on the market. Generic versions faced difficulties gaining FDA approval due to the complexity of the device and the drug it delivers, leaving consumers with few affordable options.
High demand: Epinephrine auto-injectors are essential for people with severe allergies, and demand for the product remained consistently high. As a life-saving medication, consumers were often willing to pay the higher prices despite the financial burden.
Insurance coverage: Many consumers relied on insurance to cover the cost of EpiPens, leading to a lack of price sensitivity. Insurance companies may have negotiated discounts with the manufacturer, but the final cost often still fell onto the consumer through higher insurance premiums.
Exploitative practices: Critics argued that Mylan engaged in aggressive marketing tactics and lobbying efforts to extend the shelf life of their patent, limiting competition further and allowing them to maintain high prices.
The public outcry over the excessive price increase of the EpiPen prompted lawmakers and regulatory bodies to scrutinize pharmaceutical pricing practices and led to discussions about increasing competition and affordability in the healthcare industry.
This example highlights how certain products or services can become outrageously expensive when companies exploit market conditions, lack of competition, and the critical nature of the product, leading to financial strain for consumers and public criticism.