With Mylan’s massive price hike of the EpiPen there has come an avalanche of questions and accusations as to why such a large price increase was needed and who is responsible. As we recently pointed out, Mylan effectively cornered the market on the EpiPen, and it took advantage by hiking the price well beyond its value. Irrespective of whether or not Mylan should have taken this course of action, the principle remains, when businesses lack competitors, there is little to hinder them from charging higher prices. So why are there no competitors producing a similar product to the EpiPen?

The FDA is the government agency tasked with approving new drugs and drug-related products for public consumption. The FDA’s explanation as to how Mylan was able to corner the market on EpiPens has to do with its rather large backlog of yet-to-be approved drug applications. As NPR reported, “The FDA had 4,036 generic drug applications awaiting approval, and the median time it takes for the FDA to approve a generic is now 47 months. … The FDA has approved more generics [drugs] in the past few years, but a flood of applications has added to the problem.”

When compared to Europe’s drug testing and approval agency, the European Medicines Agency, the FDA finds itself quite a distance behind — the EMA’s backlog currently sits at a mere 24 drugs awaiting approval. As every bureaucracy does, the FDA blames lack of funds and lack of staff needed in order to better meet the demands of testing and approving of new drugs in a more timely manner.

Regulations can be important, but when business becomes too caught up in red tape or other non-essential obstacles to efficiency it leads to situations like the one currently surrounding the EpiPen — Big Government and Big Business yield cronyism, not free-market capitalism.