You may recall last year when Mylan's multi-year price-gouging strategy for their $600+ EpiPen 2-packs came under a large spotlight. It's rather amazing to think that by combining an easily available drug with a syringe, along with a bit of fancy bribery lobbying and regulatory "protections", Mylan was able to raise the price of their EpiPen 2-packs SIX FOLD in as many years, from $100 in 2009.

For those of you who don't know what EpiPens are used for, this summary from the Adamis press release offers a nice summary:

Anaphylaxis is a serious, sometimes life-threatening allergic reaction. The most common anaphylactic reactions are to foods, insect stings, medications and latex. According to information published by industry sources, up to 8% of U.S. children under the age of 18 have a food allergy, and approximately 38% of those with a food allergy have a history of severe reactions. Anaphylaxis requires immediate medical treatment, including an injection of epinephrine. The number of prescriptions for epinephrine products has grown annually, as the risk of anaphylaxis and allergic reactions have become more widely understood. The company estimates that sales of prescription epinephrine products in 2016 were at least $1 billion, based on industry data.

Link: Adamis Pharmaceuticals Receives FDA Approval for Its Epinephrine Pre-Filled Syringe

Again, the real problem is not the with $600 EpiPens, but with onerous government rules and regulations that make it impossible for competitors to offer one for 5 bucks! If someone chooses to buy a thousand dollar bottle of wine, that's fine, it's their choice. They can also choose to buy a bottle of $2 buck Chuck (now actually $3 bucks) as well, because competition makes it available. Add a potentially life saving product to the mix, and having a competitive marketplace becomes even more critical!

As Milton Friedman once said, "If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand." Or, in this case, you'll have a shortage of affordable life-saving drugs and healthcare. Yet many people still believe the government can "fix" all this, of course if only we give even more power to do so! But I digress...

It's the same thing with Martin Shkreli's Daraprim price hike to $750, for a pill that can literally be made for $1, as Imprimis Pharmaceuticals offered to do. The way Imprimis accomplished this was by creating an alternative "compounded formulation" of the active ingredient in Daraprim, pyrimethamine, and another drug, leucovorin, available for $99 for a 100-count bottle, or less than $1 per pill.

Returning to the EpiPen, there have since been numerous competitors that have come forward with various alternative "solutions", even including a cool DIY version that you can assemble yourself!

Introducing the DIY EpiPencil you can make yourself for under $30!

Link: Introducing the $30 DIY EpiPencil

In another case, Dr. Cathleen London, a family doctor in Milbridge, Maine, thought to herself, "This is disgusting. There’s got to be another auto-injector." The price of EpiPens is related entirely to the device itself, and NOT the active ingredient, epinephrine, which costs pennies! After some research, she also devised a workaround for her patients who were in need of one for a fraction of the price.

“I basically build an auto-injector. I can do it for pediatric and adult dosing,” she said. “I found the right syringe. I put in the dose that I wanted. Whether it’s expired or used, people come back and refill it.”

Link: Instead of trashing a $600 EpiPen, some patients are getting a refill

For those who would prefer a less DIY approach for their EpiPens, after the fallout, Mylan did release an "authorized generic version" of the EpiPen that cost less, or about $300 for a two-pack (which is still nuts)! Also, CVS made an authorized generic for Impax Laboratories Inc.'s Adrenaclick available at about $100 for a two-pack early this year. As expected, Mylan's response to the competition was that their version is the most reliable.

NEW COMPETITOR ADAMIS (NASD:ADMP)

And, of course, today, we have one more potential competitor now that the FDA has approved Adamis Pharmaceutical's competitive product Symjepi. Unfortunately, Adamis did not say how much Symjepi would cost, only that it is expected to be a lower cost alternative. It should be available by mid-summer, and the company is also preparing to apply for approval for a children's version of Symjepi as well.

Link: Adamis Pharma Stock Skyrockets After Rival EpiPen Product Gets FDA Approval

FOR THE TRADER IN YOU

I'd be remiss if I didn't give a bit of trading / investing perspective on this as well, as NASDAQ:ADMP (Adamis Pharmaceuticals Corp.) shares soared over 60% to a one-year high today after the company announced that Symjepi approved by the Food and Drug Administration.

Now, the thing about companies that come out with competing generic drugs... While they may be taking on quite the noble cause, the companies behind these generic products unfortunately don't often make for very good investments. To think in terms of Warren Buffett, where's the "competitive moat"? This may hold even more truth for biotech companies, especially given their high capital burn rates, further accelerated by the hefty regulatory burdens they must also shoulder.

For example, while it was great that Imprimis went on to produce a $1 version of Dariprim, and some traders (at least temporarily) loved the company's "moment in the spotlight", how did the company fare afterwards? With a high burn rate, and one more product that would have razor-thin margins at best, it probably wouldn't make for the ideal long-term investment. Ah, yes... the great conflicts and compromises one must face and endure when decided where best to invest one's hard-earned capital...

47% Price Spike in Imprimis after news that it would produce a $1 version of Daraprim October 23rd, 2015:

So, how has ADMP fared since then? Sadly, not all that well, and that's being very generous...

and FINALLY...

I'll just throw in one last thing on Martin Shkreli. Love him or hate him, he's a very intelligent guy, and with his Daraprim "move", he's probably done more to shed light on all these healthcare and pharmaceutical "games and shenanigans" than any one else has in years. And as Shkreli himself claims, none of it would be possible if Congress wasn't completely complicit and "in bed" with these companies in the first place. It's also why he called lawmakers a bunch of imbeciles at his congressional hearing, treating it as the "horse and pony" show it really is...

If you haven't yet seen this 2016 interview between Tucker Carlson and Martin Shkreli, it's definitely worth watching:

As always, I appreciate your upvote, your follow and all your comments!