Mylan CEO Bresch grilled by Congress over EpiPen
- The House Oversight and Government Reform Committee on Wednesday grilled Mylan CEO Heather Bresch in a much-anticipated hearing, with many legislators denouncing the company’s sharp price increases on EpiPen.
- While Bresch expressed some measure of regret over the EpiPen controversy, she defended Mylan’s $608 price tag for a two-pack of Epipen.
- Bresch claimed Mylan only made $50 per pen in profit, with other costs going to rebates, fees and cost of goods. U.S. lawmakers gave little ground, however, accusing the company of using EpiPen to become “filthy rich.”
It was only a matter of time before a Congressional committee dragged Bresch into to testify over Epipen after outrage built over Mylan’s steady price hikes for EpiPen.
Over the past year, Martin Shkreli, former CEO of Turing Pharmaceuticals, and Michael Pearson, ex-chief of Valeant, each had their turn in front of the House Oversight Committee for drastically raising prices on older drugs.
Bresch’s hearing followed the same script – except there was a lot more back and forth than Shkreli’s stonewalling of the committee in February.
In prepared testimony, Mylan CEO, Heather Bresch, attempted to explain the company's pricing policy, protesting that the $608 price gave a false impression of high profits. According to Bresch, Mylan receives $274 on each EpiPen two-pack, after rebates to payers and fees eat up $334. Subtracting a cost of goods of $69 and other related (but unspecified) costs leaves Mylan with $100 profit per two-pack.
“The misconception about our profits is understandable, and at least partly due to the complex environment in which pharmaceutical prices are determined,” Bresch said in her prepared testimony. “The pricing of a pharmaceutical product is opaque and frustrating, especially for patients.
Bresch did give some semblance of regret for the difficulty caused by Mylan’s price hikes, saying the company “never intended this.” But she failed to back up her claim that Mylan saved the U.S. $180 billion in medical expenses and wouldn’t definitively rule out the possibility of future prices increases in 2017, according to a report from Business Insider describing the hearing.
Mylan is launching a generic form of EpiPen (identical in everything but name) that it will sell direct for $300.
In addition to scrutiny from Congress, Mylan faces an inquiry from the West Virginia Attorney General, which this week targeted the company in a subpoena over whether Mylan violated the state's Medicaid program and Antitrust Act.
The New York State Attorney General is also investigating antitrust allegations.
- House Oversight Committee Prepared testimony
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