Brand name drugs typically enjoy a long run at high prices – sometimes for as long as 20 years – before they must be offered in cheaper generic forms. (Sometimes brand names makers cheat a little bit, with pay-to-delay schemes, keeping generics off the market a little longer in order to make more profits, but that’s another story.)
Expensive at Half the Price
Mylan Pharmaceuticals and its now infamous CEO Heather Bresch knew they needed to respond to a relentless social media campaign that took umbrage at Mylan’s taking advantage of sick people. The company response was to announce the launching of a generic version of EpiPen, at 50% off its current price. The company also announced that it would work to make EpiPen treatment more affordable.
Congress Investigates EpiPen
Where social media goes, votes go, especially in an election year; so now Congress has announced that it is investigating Mylan. The House Oversight Committee sent a letter to Ms. Bresch Monday, August 29, 2016 to request a briefing as well as company documents regarding EpiPen.
Mylan has sought to pin the blame for its price gouging on a shadowy health care system and supply chain. Ms. Bresch has responded to criticism by calling the system “broken.” She has said it is in “crisis,” comparing it to the 2008 financial crisis. She took no blame (or credit, for that matter – depending on your viewpoint and stock portfolio) for her company’s wildly jacking up prices because they can.
Critics say Mylan lacks Empathy
Ms. Bresch’s arguments don’t wash with many.
Wells Fargo analyst David Maris said Mylan doesn’t understand the “very emotional, very stressful situation” parents are going through when their children need this drug.
“No one’s expecting Mylan to give away their products,” said Mr. Maris. But empathy is the most human emotion. And when you raise prices year after year, by a lot, for a drug that’s lifesaving, it shows a complete lack of empathy.”
No one forced Mylan to dramatically raise EpiPen prices, Mr. Maris pointed out: “It’s outrageous. People shouldn’t be fooled by the idea that the system made them do it. Mylan is to blame for the high prices of EpiPen.”
Broken System or Opportunistic?
The most recent round of price hikes looks more opportunistic rather than a result of health care system problems. In November 2015, Mylan raised EpiPen prices by 15% (the 14th price raise since 2009), just one month after EpiGen’s main rival Auvi-Q was pulled from the market. Six months later, Mylan again raised prices, by another 15%.
Bernstein analysts wrote in a recent report that Mylan was in a position to raise prices because competitors were out of the market; so Mylan raised prices.
EpiPen CEO made $19 million last year
Ms. Bresch made a cool $19 million as Mylan CEO last year. Maybe the outrageous EpiPen price hikes were needed to help pay her outrageous salary. The daughter of a U.S. Senator (Joe Manchin), Ms. Bresch is nobody’s fool. She has shown that she knows how to fire back with a good sound bite as well as her daddy or any other Washington D.C. politician.
Do Good and Do Well?
Ms. Bresch said to the nation’s paper of record, The New York Times: “You can do good and do well, and I think we strike that balance around the globe.”
She did also add, perhaps for the benefit of her shareholders and the American way: “I am running a business. I am a for-profit business. I am not hiding from that.”
Some people, however, no doubt wish they could hide from her company’s prices.
$1,260 out of pocket expenses
A New York Post story of August 26, 2016 details the lives of Tom and Samantha Marino trying to keep up with their son’s EpiPen meds. While Ms. Bresch also told the Times that most of EpiPen’s costs for people are paid by insurance, that doesn’t appear to be the case with the Marinos.
Mrs. Marino told the Post that earlier this year, the couple paid $1,260 out of pocket for three EpiPens that will expire in February 2017. That was before the latest price increases.
The Marinos said they need three EpiPen Jr 2-Paks for their young son, who has a severe reaction to peanuts that can be life threatening They keep one at home, one in Mrs. Marino’s pocket, and one at school.
Epi Pen Scandal takes Generic Turn
This might be an easy story to ignore for those of us who don’t need EpiGen, but there for the grace of God go we. How many more drugs will Big Pharma be able to gouge people for before some sort of reasonable regulation is put into place to protect us from the unreasonable booty taken by a $19 million per year CEO and her rapacious company?
Perhaps her senator father will get the job done and protect us all from future gougings? You think?