Commentary

Mylan Attacked On Multiple Fronts For EpiPen 'Price Gouging'

It’s been years in the making but the controversy swirling around Mylan’s jacking up the price of its auto-injector EpiPen, which can be a life-saving intervention for children suffering from severe allergic reactions, is gathering multiple angles and increasing force as the week goes on. 

“EpiPen Price Gouging Came As Mylan Pulled Off Tax Inversion,” reads the headline on Liz Claman’s piece for Fox Business.

“Mylan Execs Gave Themselves Raises As They Hiked EpiPen Prices,” Ben Popken tells us on NBC News — including a 671% increase for CEO Heather Bresch over an eight-year period.

Mylan Raised EpiPen’s Price Before the Expected Arrival Of A Generic,” according to Andrew Pollack’s piece in the New York Times.

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And so, as you might expect, “the political pressure continued to grow Wednesday with another Senate committee demanding answers for why the cost of EpiPens has skyrocketed and Hillary Clinton denouncing the price hike on the presidential campaign trail,” writes Catherine Ho for the Washington Post. “Sens. Susan Collins (R-Maine) and Claire McCaskill (D-Mo.), the chair and ranking Democrat of the Senate Special Committee on Aging, sent a letter to Mylan chief executive Heather Bresch seeking information on the company’s pricing practices.”

Let’s back up a bit. 

“With a quick stab to the thigh, the EpiPen dispenses epinephrine, a drug that reverses swelling, closing of the airways and other symptoms of a severe allergic reaction to bee stings, peanuts or other allergens,” wrote Tara Parker-Pope and Rachel Rabkin Peachman in a New York Times “Well” column published Monday evening that seems to have ignited national attention to the issue.

They described a grassroots advocacy effort “by consumers and lawmakers who worry that parents won’t be able to afford the pens for children heading back to school.” Wholesale prices have risen from less than $100 for a two-pen set in 2007, when Mylan acquired the product, to $608.61 this May.

Last September, though, Bloomberg’s Cynthia Koons and Robert Langreth wrote a story titled “How Marketing Turned the EpiPen Into a Billion-Dollar Business.” It chronicles the way the company boosted revenue from $200 million in annual sales to more than $1 billion. In its own words, it did so by “[working] tirelessly over the past years advocating for increased anaphylaxis awareness, preparedness, and access to treatment.”

That included lobbying with patient groups to push for federal legislation encouraging states to stock epinephrine devices in schools. It didn’t hurt that Mylan CEO Bresch, who is credited with hitting “on the idea of using old-fashioned marketing in part to boost sales among concerned parents of children with allergies,” is the daughter of U.S. Sen. Joe Manchin (D-W.Va.)

“They have done a tremendous job of taking an asset that nobody thought you could do much with and making it a blockbuster product,” Leerink Partners analyst Jason Gerberry told Koons and Langreth.

Because epinephrine is unstable, the EpiPens need to be replaced every year. And “kids need them in many places,” Aaron E. Carroll a professor of pediatrics at Indiana University School of Medicine, blogged in the NYT’s “The Upshot” on Tuesday. “They need them at home. They need them at school. They need them at camp. They may even want to stash one at Grandma’s house. So people often need to buy quite a few.”

“A petition to Congress protesting the price increase, called ‘Stop the EpiPen Price Gouging,’ has emerged on social media. It has collected more than 48,000 signatures,” Parker-Pope and Peachman wrote Monday. As of early this morning, nearly 71,000 people had sent more than 107,000 letters and emails, and several were being added every minute. 

Prof. Carroll concluded: “By digging a bit further, the story of EpiPens can also explain so much of what’s wrong with our health care system.” 

And that’s exactly what has been occurring as the week unfolds. But Carroll’s take is decidedly different from Mylan CEO Bresch’s.

“On an earnings call earlier this month, Bresch blamed EpiPen sticker shock in part on Obamacare. She said that employers’ increased use of high-deductible plans, one of the side-effects of the law, has resulted in patients paying more out of pocket for the drug, and that’s ‘where you’re seeing a lot of noise around EpiPen,’” writes Jen Wieczner for Fortune. “What’s more, Bresch, citing the roughly $600 wholesale cost, added that when you look at other treatments, the EpiPen does not fall into the category of ‘an expensive product.’”

Referring us to a profile she wrote last year — “Why Wall Street Loves to Hate Mylan’s CEO” — Wieczner says “but Epipen … is supposed to be the company’s shining success story.”

It’s becoming a case history in overreaching instead.

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