There are very few issues in Washington that can enthusiastically unite a Republican congressman like Jason Chaffetz and a Democratic one like Elijah Cummings. But this week, one woman has managed to get them both on the same page: Heather Bresch, the CEO of Mylan, maker of the EpiPen, a life-saving drug for those who have severe allergies. Both lawmakers questioned the ethics of Mylan’s pricing and dismissed Bresch’s attempts to defend the company.
Bresch, who made $18.9m in 2015, is weathering some justifiably sharp scrutiny right now due to the fact that her company hiked the cost of EpiPens to $608 a pack, or almost 600%, in a few short years. This despite the fact the product has been on the market for decades and contains an active ingredient that costs about $1. The consequences of the price hikes are very real, restricting access to lifesaving medicine for families like mine, who have a child with a life-threatening allergy.
Public officials were aghast at learning of the extent of Mylan’s greed. Many blushed at Bresch’s audacity in recent weeks as she refused to lower the inflated price by even a dollar and dared to go straight to the corporate crisis playbook of muddying the waters and claiming that outraged consumers were simply “confused”. As the parent of a child who relies on this lifesaving medication, I would like to assure Ms Bresch that I understand the situation quite clearly.
Lawmakers responded by calling for Bresch to testify to explain her company’s actions, which she did Wednesday afternoon before the House oversight and government reform committee.
She began her defense by asserting her company’s right to make a profit, which is not in dispute. She is resolute that Mylan is elegantly threading a needle of corporate responsibility, saying: “Price and access exist in a balance, and we believe we have struck that balance.”
I’m not sure the American families reliant on the EpiPen feel that way. After the news of EpiPen’s price inflation hit last month, many parents shared their families’ stories of straining to meet the growing cost of their child’s essential medication. Some said that they send their children to school with expired syringes, hoping that the medication is still effective, a practice one parent compared to playing “Russian roulette” with her child’s health. Others told of making the difficult decision about whether to pay the mortgage or for their child’s EpiPen. Mylan’s version of “balance” has nearly knocked many families off their feet.
Bresch went on to suggest that her company, which has full discretion and autonomy to make any pricing decision it wants, is raising the cost of EpiPens because of forces out of its control. “The irony is the system incentivizes high prices,” she said, blaming insurance companies and drug benefit managers. This is a bogus defense, considering drug price hikes like the ones she has presided over are very much part of the equation that raises the costs in the entire health sector for consumers.
For instance, even if the point-of-purchase price is subsidized by insurance providers, those companies do not simply eat the cost in an act of charity. They pass it on to consumers in the form of higher premiums or copays. Bresch can throw up her hands if she wants, but actions like hers are exactly what makes the American healthcare system so distorted.
Bresch has also tried minimizing the gains made from selling the EpiPen, saying that her company only makes $50 a syringe. That may be the case, but the profits are still obscene, unfettered by the coupons the company makes available to some consumers or their plan to suddenly innovate a generic version of the drug. Mylan produces hundreds of products, but EpiPen drives a full 10% of the company’s profits.
Some of the largest swings in price have occurred since Mylan was given the gift of a monopoly over the market when Sanofi was recently forced to pull its alternative from market shelves. This is clearly not a company doing what’s necessary to keep its doors open while it recoups the cost of research and development. The company did not even create the EpiPen and expects to reap $1.1bn in profits in 2016.
I called our pharmacist before the start of school this year, to see if my kindergartener could use an alternative product to one made by Mylan. I was told that none were available. So I hung up the phone, defeated, along with countless other parents across the country who have our backs against the wall as we continue to line Bresch’s pockets to keep our children safe.