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Government involvement in drug pricing is a Trojan horse, analyst says

EpiPen pricing fallout

Drugmakers have been under scrutiny since Mylan's EpiPen price hike, but government involvement in controlling costs is not necessarily the answer, Wells Fargo Securities analyst David Maris said Thursday.

Democratic presidential nominee Hillary Clinton has said if elected, she would create an oversight panel to monitor price increases and impose penalties for unjustified hikes.

"I don't think that having government run that process is really the right way, because it's a Trojan horse for price controls. Once they start controlling a little bit of price, then the temptation is to control all of price, and if you do that, you really get fewer drugs invented," he said in an interview with CNBC's "Power Lunch" from the Wells Fargo Healthcare Conference in Boston.

Instead, Maris thinks the pharmaceutical industry will likely follow Allergan's example of policing its prices.

The Botox-maker has said it will raise prices no more than once a year and keep the hikes to no more than low-to-mid-single-digit percentages.

Maris called the move brilliant, and said it reflects the current corporate culture.

"Everyone understands that drug companies should make a little bit more each year; that their costs go up. Their people have to get paid more. Science costs more to do. But if we could limit maybe the outliers," he said.

Mylan has come under fire for boosting the price of its anti-allergy injection device to more than $600 — up from about $100 in 2008. The company has since said it will launch the first generic version of the drug at half the price.