Mylan NV Chief Executive Officer Heather Bresch struggled to defend herself against harsh congressional questioning at a House Oversight Committee hearing Wednesday afternoon, after the company’s price hikes on the EpiPen allergic-reaction treatment sparked public backlash.
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In testimony for Congress, CEO Heather Bresch says she believes Mylan has struck a balance between price and access to the drug.
Mylan is grappling with a growing backlash from US consumers, lawmakers and prosecutors over EpiPen prices, which have risen from about $100 in 2007 to more than $600 for a pair of the devices.
Committee chair Jason Chaffetz also noted that Mylan will now off a generic version of the device for hundreds of dollars less than the EpiPen.
But Bresch repeatedly emphasized that Mylan realizes just about $274 out of that wholesale acquisition cost, and only has a net profit of about $50 per EpiPen after taking discounts, rebates, patient assistance programs and outreach, and other expenses into account. The coupons insulate patients from the price hikes, but insurance companies, employers and taxpayers must still pay more for the rest of the bill for the drug.
“We’ve seen it over and over and over again”, said Rep. Elijah E. Cummings, calling out Mylan, Turing and Valeant Pharmaceuticals, which also faced Congress this year.
Members of the panel also directed criticism at the Food and Drug Administration for not doing more to introduce similar products to the market. Public filings show she made about $2.5 million as Mylan’s president in 2007. Bresch’s prepared testimony was released by the House Oversight and Government Reform Committee ahead of her September 21 appearance before the panel.
A review of Mylan profits by David Maris, a pharmaceutical analyst at Wells Fargo, shows that the unit that markets EpiPen increased its operating profit margin from 8.8% in 2008 to 60.3% in 2016.
“I truly believe the story got ahead of the facts because of the complexity of the pharmaceutical industry”, Bresch said during the hearing. But then he turned to Bresch, and described the company’s lobbying efforts on behalf of laws encouraging or requiring schools to keep devices like EpiPen on hand.
Previous year when the WAC for a two-pack was about $530, Mylan realized a profit of $38 per pen, Bresch said when pressed. It has also introduced a generic version that is half the price of the brand. Duncan said the lack of a free drug/device market is primarily the fault of the FDA, which has made it nearly impossible for a small company to get a drug or device to market.
Her testimony came a day after the attorney general of her home state of West Virginia said he is conducting a probe of whether Mylan engaged in fraud in the way it paid rebates on the devices to the state’s Medicaid program. However, the availability of alternatives may not be enough – the introduction of Auvi-Q in 2013 did not lead to lower prices.
“We’ve worked diligently and invested to enhance EpiPen and make it more available”.
Last year, more than 3.6 million USA prescriptions for two-packs of EpiPens were filled, according to data firm IMS Health. “I think many people incorrectly assume we make $600 off each EpiPen”.
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In the Senate, leaders of the Senate Homeland Security and Governmental Affairs’ investigations subcommittee said earlier this month that they have begun an inquiry into the company’s pricing and competition practices. Richard Blumenthal of CT and Amy Klobuchar of Minnesota requesting that the Federal Trade Commission investigate whether Mylan violated federal antitrust laws to protect Epi-Pen from competition. The Aging Committee requested briefings on the issue, and Iowa Sen.
