This is one of the challenges with drug pricing. If you're pricing your drug to the benefit it offers (which is what is generally done), you better do it at launch or you're screwed.
This has actually happened with other drugs in the past. The drug company runs a clinical trial in one disease, gets good data and sets a price. The drug then gets approved in another indication where the value is much higher, so they try and raise the price to reflect the added value. Usually it results in outrage.
And that -after significant and hefty lobbying of legislatures to mandate that schools, EMS units (capable of managing, maintaining and drawing up epi themselves) and the like be required to carry them-.
http://nces.ed.gov/fastfacts/display.asp?id=84
So it's around 3-5% of their market ($600 per school is 2.5% of their $2.4 billion annual revenue on the pens). I guess that is a pretty substantial chunk.
The cost to market for the EpiPen was recouped long before Mylan even bought the company. This is just gouging. Believe me when I say that someone else will pop up as soon as possible (FDA approval takes a long time) with a product that costs a 5th as much, as long as Mylan doesn't manage to rig the system.
I agree that it's a not a price vs. demand equation since demand won't drop off for a product like this since there aren't really any substitutes (other than the vial and syringe which has limitations). However, public response to a price is a very strong motivator for drug companies. I can guarantee you that Mylan's C-suite is in a frenzy right now trying to figure out how to fix this.
Of course, we want strong requirements on life saving devices. Just a bummer it takes such an awfully long time.
Anyone know the longest pole schedule item in getting a new drug/treatment to market?
(1) It's better to be in a business where you don't (literally) save lives, because nobody complains about how much money the Pokemon game makes.
(2) People won't actually take a lot of risk to market and develop life-saving products without a financial incentive.
Epinephrine is not patented. The only thing stopping a competitor from entering the market is coming up with a delivery mechanism for the drug that's as reliable as Mylan's. Apparently that has proven difficult. Sanofi used to make a competing device, until it was forced to do a mass recall because the device couldn't deliver an accurate dosage.
The difficulty of getting it right is compounded by the fact that a device that delivers epinephrine to children in anaphylactic shock is just about the highest-risk product you can make from a potential liability point of view. There is no market for a "slightly less good but much cheaper" product.