The CEO of the company that manufacturers the EpiPen device — which has been harshly criticized over the past several weeks for dramatic price increases that are putting the allergy medication out of reach for some families — was grilled by members of Congress on Wednesday for using the product to “get filthy rich at the expense of our constituents.”
Mylan CEO Heather Bresch appeared before the House Oversight Committee on Wednesday afternoon to answer for the continued outrage over the rising cost of the EpiPen. She was joined by Dr. Doug Throckmorton, the deputy director of the Center for Drug Evaluation and Research at the FDA.
— House OversightDems (@OversightDems) September 21, 2016
The hearing was called for by the committee chairman, Representative Jason Chaffetz (R-UT), and its ranking member, Elijah Cummings (D-MD) — both of whom used their opening remarks to interrogate Bresch and Throckmorton on why the EpiPen is getting so expensive.
Since Mylan purchased rights to the device in 2007, the price has quintupled from $50 for one pen to over $600 for two. According to research from the watchdog group Public Citizen, Mylan’s price for the EpiPen far outstrips the price of two of the devices in other countries — which range from $210 in Germany, the highest, to just $69 in the United Kingdom.
Cummings was particularly harsh on Mylan in his opening statement.
“This hearing is critical because yet another drug company, Mylan, has jacked up the price of a lifesaving product for no discernible reason — and I did read your testimony, Miss Bresch, I was and not impressed — they raised the prices, the reason being, I believe, to get filthy rich at the expense of our constituents,” said Cummings.
During her testimony, Bresch pointed out the measures that Mylan has recently taken to address public outrage over its price increases: namely, introducing a generic version of their own drug at a cost of $300, half the current retail cost — a move that she called “unprecedented” — and increasing patient assistance programs.
But Cummings, comparing the hearing to an earlier hearing with notorious “pharmabro” Martin Shkreli — who sparked national outrage for dramatically raising the price of a cancer drug — was not impressed.
“This is the same PR playbook other companies use when your price increases finally spark public outrage, just say you are expanding your patient assistance programs and make as much money as you can along the way,” said Cummings. “After Mylan takes our punches, they will fly back to their mansions and private jets and laugh all the way to the bank while our constituents suffer, file for bankruptcy and watch their children get sicker or die.”
“They raised the prices, the reason being, I believe, to get filthy rich at the expense of our constituents”
Cummings was not alone in his outrage. Chaffetz, the chairman of the committee, also used his time to grill Bresch, focusing on the lack of competition for the product and the specific economics at play.
“Suddenly, feeling the heat, feeling the pressure, Mylan has offered a generic version, and cut the price in half. So that does beg the question, what was happening with the that other 300 dollars?” Chaffetz asked.
Another popular topic was executive salary — Bresch’s work at Mylan earned her a cool $18 million last year, which this year earned her scorn from both sides of the aisle.
“I am a pro-business conservative Republican, and I am just sickened,” said Representative John Duncan (R-TN).
Bresch, for her part, insisted that Mylan did not gain as much profit from the EpiPen as “ many people incorrectly assume,” putting the company’s actual net profit per pen at about $50. However, despite repeated requests from multiple representatives, she declined to break down exactly where the money went between the market cost of the EpiPen and Mylan’s estimate of $50 — saying that it went to patient assistance programs and advertising, but failing to clarify the exact breakdown.
— Kaiser Family Found (@KaiserFamFound) September 21, 2016
Mylan paired the price increases with an aggressive marketing campaign emphasizing the dangers posed by a severe allergic reaction, which Bresch characterized in the hearing as a public service raising awareness about anaphylaxis. The company has particularly emphasized the risks posed to children, piggybacking off a legislative push to stock EpiPens in schools after a 7-year old died of an allergic reaction in Virginia.
This too has been a source of controversy for Mylan’s embattled CEO — according to reporting from USA Today, the push to stock schools with autoinjectors came shortly after Bresch’s mother, Gayle Manchin, took over the National Association of State Boards of Education (West Virginia Senator Joe Manchin is Bresch’s father). In the hearing, Bresch said the report was a “low blow.”
Now nearly every state recommends or requires that schools have an epinephrine injector on hand; under the so-called “EpiPen Law” the White House gives funding preference to schools that stock the devices — and while schools are not required to choose one autoinjector over another, EpiPen’s near monopoly in the market ensures that most schools are stocked with the brand-name devices.
While public awareness and access to potentially life-saving autoinjectors is important, the marketing push also conveniently expands Mylan’s consumer base — and awareness does little good if the device is priced out of reach.