Mylan CEO Heather Bresch arrived at the 2016 Forbes Healthcare Summit on December 1 surrounded by a cloud of fresh controversy, this one created by her mere appearance at the event. Bresch had refused to testify at a Congressional hearing the day before, where Senator Chuck Grassley (R-Iowa) had planned to review the $465 million settlement Mylan agreed to pay the U.S. Department of Justice over allegations it overcharged Medicaid for its allergy shot EpiPen. Grassley is crying foul that Bresch volunteered to speak at the summit but refused to defend Mylan’s actions before Congress.
“The billions of dollars Medicare, Medicaid, private insurance and patients spend on prescription drugs put drug companies in the public eye,” Grassley said in a statement regarding Bresch’s appearance at the Forbes event. “If CEOs can voluntarily appear at health summits, surely they should voluntarily appear before a Senate committee.”
Mylan CEO Heather Bresch demonstrates old and new EpiPen models at the 2016 Forbes Healthcare... [+]
But if anyone was expecting Bresch to apologize for Mylan’s EpiPen actions ever since revelations of 400% EpiPen markups appeared over the summer, they were likely disappointed. “We absolutely raised the price and take full responsibility for that,” she said.
Bresch insisted Mylan's price increases were justified by improvements the company made on the product. She held up the EpiPen that Mylan originally acquired, explaining that it was confusing for patients to use and that it frequently caused accidental sticks. Then she held up the current version of EpiPen, explaining that it's more ergonomic and less likely to cause injury. "The idea that there was no advancement in the product is inaccurate."
Bresch has continually denied wrongdoing in the EpiPen pricing scandal. On September 21, she told the House Oversight and Government Reform Committee that the company only makes $100 on each two-pack of EpiPens. She tried to appease House representatives by talking up Mylan’s access program and its decision to introduce a generic version of the drug. But members of the committee blasted the CEO for dodging their direct questions about the markups.
Later that month, the Centers for Medicare and Medicaid Services (CMS) told Mylan it had misclassified EpiPen as a generic drug, making it eligible for rebates that were lower than what the company should have been paying. On October 7, Mylan agreed to the settlement that Grassley is now contesting. Under the terms of the settlement, the company does not have to admit wrongdoing.
Bresch’s image throughout the debacle has been further hampered by the fact that her father is U.S. Senator Joe Manchin (D-W.V.), who has continually defended his daughter while at the same time distancing himself from the pricing scandal.
During the Forbes summit, Bresch denied allegations that she has put much of the blame for rising EpiPen prices on pharmacy benefits managers (PBMs) and other members of the payer community. “I didn’t point the finger of blame on the PBMs. What I said is there’s a lack of understanding of where that full list price goes,” she said. She went on to say there's "distance in the drug chain" between the price a manufacturer places on a drug and what it ends up costing consumers out-of-pocket.
Bresch added that she believes there needs to be more transparency in how drugs are priced along that chain, and she suggested that families who are in high-deductible insurance plans ended up with most of the burden of rising EpiPen prices. “I absolutely believe that if EpiPen had to be the catalyst to show this window of what families are facing in a high-deductible plan…than it would have been worth it,” she said.
Although Bresch admitted the company was blindsided by the EpiPen backlash, she did her best to show that there's more to Mylan than the now infamous anti-allergy injection. She said the company sells over 635 products for an average price of 25 cents per dose. She added that Mylan is awaiting FDA approval for 24 products.
Still, the EpiPen controversy has taken a toll on Mylan’s stock, which has fallen from $54 at the beginning of the year to $36.60. Although Mylan's revenues in the recently announced third quarter rose 13% year-over-year to $3.1 billion, the company announced that wholesaler purchases of EpiPen dropped in anticipation of Mylan’s plans to launch a generic version of the drug. The company swung from a profit of $428.6 million in the same quarter last year to a loss of $119.8 million, which it attributed to the DOJ settlement.
Bresch has become a public scapegoat in an ongoing debate about drug pricing that goes far beyond EpiPen. Last month, two hospital groups released a study showing that inpatient drug costs skyrocketed 38% to $990 per patient admission from 2013 to 2015. It was enough to prompt one Cleveland Clinic exec to quip that keeping up with rising drug prices is “like playing Whac-A-Mole.”
A September report in the Journal of the American Medical Association (JAMA) revealed that drug spending in the U.S. is $858 per person per year—more than twice that of 19 other industrialized countries. And it’s not just EpiPen’s price that’s out of control. The average price of insulin was up 300% between 2002 and 2013, while the cost of heart drug isoproterenol flew 2,500%.
Pharma investors rejoiced in the days after the presidential election largely because they perceived that President-elect Donald Trump would be less of a critic of drug pricing than Hillary Clinton would have been. But whether this issue goes away under the new president remains to be seen. On the eve of the election, the Henry J. Kaiser Family Foundation released a poll showing that 63% of people think the government should take action against rising drug prices.
The private sector continues to push for more transparency in how drug companies set prices. On November 1, for example, the American Medical Association launched TruthinRx.org, an interactive website that encourages patients to communicate with Congress about the need for more regulation on pricing.
Bresch said she believes drug pricing needs to get more in step with the increasing expectation that patients treat healthcare like any other consumer product. “I’ve been at Mylan for 25 years and the pricing system hasn’t changed much over those 25 years. It has not reinvented or kept up with who we are today, or how we want patients to engage,” she says.
But she insisted that Mylan alone shouldn't be expected to lower prices to appease consumers—and that the company shouldn't be defined by the EpiPen debacle. “We’re not the company that bought a product and raised the price overnight.”
