Mylan paying a price for its EpiPen riches
For Mylan CEO Heather Bresch, it must have seemed like having a root canal – on all 32 teeth.
Bresch was the “guest of honor” Wednesday when the House Oversight Committee held a hearing in response to the huge national outcry over the soaring price of the drugmaker’s EpiPen injectors, which are used to prevent anaphylactic shock in people who have severe food and other allergies.
Over the past 10 years, Mylan, which has its operational headquarters in Southpointe, has raised the price of a two-pack of EpiPens by 500 percent, to more than $600. And those injectors have a fairly short shelf life, forcing those who need them – for whom they could be the difference between life and death – to replace them frequently.
Bresch, whose $19 million compensation last year also raised eyebrows and ire, tried her best to peddle the company line. She told lawmakers the company gave away hundreds of thousands of the devices to schools, expanded a rebate program to reduce the cost to consumers and plans to roll out a cheaper generic version of the EpiPen. She also said Mylan makes just $100 in profit from the $600 packs of pens. But before you start planning a spaghetti dinner or a bake sale to raise funds to make sure Bresch and the other execs at Mylan don’t end up on Skid Row, know this: Mylan sold about 4 million of the EpiPen two-packs over the last year. That’s $400 million in profits.
Lawmakers on the oversight panel, Republicans and Democrats alike, were not particularly sympathetic to Bresch’s explanations.
“The greed is astounding. It’s sickening,” said Rep. Jimmy Duncan, R-Tenn. “Not only by Ms. Bresch, but by the other (Mylan) executives. I’m a very conservative, pro-business Republican, but I am really sickened by what I heard today, and what I’ve read before about this situation.”
Another Republican lawmaker, Rep. Mick Mulvaney of South Carolina, noted Mylan lobbied hard in Washington and around the country for laws requiring EpiPens to be on hand in schools.
“You’ve been in these hallways to ask us to make people buy your stuff,” Mulvaney told Bresch, whose father is U.S. Sen. Joe Manchin of West Virginia. “You asked the government to get into your business. So here we are today. If you want to come into Washington and lobby us to make us buy your stuff, this is what you get – a level of scrutiny and treatment that would curl my hair. But you asked for it.”
The heaviest hits came courtesy of the ranking Democrat on the committee, Rep. Elijah Cummings, D-Md., who said, “You raised the price to get filthy rich at the expense of our constituents. You used a simple but corrupt business model that other drug companies have repeatedly used: Find an old, cheap drug that has virtually no competition and raise the price over and over again, as high as you can.”
The grilling wasn’t solely about the EpiPen price. Bresch also was questioned about the company’s decision to essentially renounce its corporate U.S. citizenship in order to reincorporate in the Netherlands, thereby cutting its U.S. corporate tax obligations. And Bresch wasn’t pleased when lawmakers brought up a report earlier this week in USA Today that said Bresch’s mother was leading the National Association of State Boards of Education when it “launched an initiative that paved the way for school systems to begin the widespread practice of obtaining auto-injector devices to counteract anapylaxis in schools.”
Cummings called on Congress to tackle the overriding issue of prescription drug costs, and he opined that Bresch and other Mylan leaders probably weren’t overly concerned about the congressional attention.
“After Mylan takes our punches, they’ll fly back to their mansions on their private jets and laugh all the way to the bank,” he said.
No one begrudges Mylan making a profit. That’s why the company is in business. That’s what its stockholders expect. But does it really have to be so predatory in doing so?