Mylan chief executive Heather Bresch faced a long, tough grilling on Wednesday from members of Congress over the escalating price of the lifesaving EpiPen auto-injector, and the hardship that poses for an increasing number of American families.
Bresch was on the hot seat in front of the House Committee on Oversight and Government Reform over the steep cost of a set of two EpiPens, which has risen an estimated 500 percent to about $600 since 2008.
Rep. Elijah Cummings, the ranking Democrat on the committee, questioned whether Mylan would genuinely reform its price strategies. “After Mylan takes our punches, they’ll fly back to their mansions in their private jets,” Cummings said in an opening statement, suggesting the company was following the “PR playbook” of other high-charging drug companies that have appeared before the committee.
“Parents don’t have a choice,” Rep. Jason Chaffetz, the Republican committee chair, noted of the importance of the device for children with severe allergies. “If your loved one needs this, it better darn well be in your backpack.”
Bresch stressed that “it troubles me greatly that the EpiPen product has become a source of controversy.” She defended her pharmaceutical company’s response to the national pricing furor that arose in August – actions that include expanded patient assistance programs along with the imminent launch of a generic version of the EpiPen device set at $300 (or half the cost). She called the latter “an unprecedented move.”
Pricing and Profits Debated
Several lawmakers questioned why the Mylan CEO didn’t just promise to reduce the cost of the EpiPen itself. But Bresch blamed a lack of transparency on a system in which pharmacy benefit managers, insurance companies and distributors all get rebates and allowances on brand products, saying she couldn’t guarantee that a price reduction her company made would be passed along to consumers.
Bresch provided numbers to show that of the $600 pricetag on an EpiPen set, Mylan’s take is $274 and that the company ultimately only has a profit after expenses of $100 a set – or $50 per device. The lawmakers expressed much skepticism about this price breakdown, which they found lacked sufficient detail.
Chaffetz and Cummings both demanded that Mylan provide: a full itemization of the costs paid out to other parties to support the $50 per device figure and documentation on EpiPen profits from 2007 (the year the firm purchased the auto-injector rights).
“Seeing is believing,” Chaffetz then told Bresch, borrowing Mylan’s own slogan. “Show it to us,” he said. The CEO agreed to provide the additional documentation in 10 days.
When faced with questions on the ethics of EpiPen price hikes, Bresch a few times pointed to Mylan’s stock epinephrine program for schools. Through this initiative, Mylan has provided 700,000 free devices to 65,000 schools across America – and they have saved lives. “Our concern was absolutely that anyone who needs an EpiPen has one,” Bresch said.
But even the motives of that program were called into question, with Democrat Rep. Tammy Duckworth pointing to a clause that requires not purchasing a competitor’s devices in order to get a discount on additional EpiPens in one Illinois schools contract.
Bresch also came under fire for her hefty pay packet – over $18 million in 2015 – and for the fact that EpiPens have grown to be a product with sales of $1 billion in 2015, all the while the price increases continued. The CEO suggested that far greater anaphylaxis awareness also accounts for the sales total.
FDA Questioned on Rival Products
One of the committee’s big concerns about epinephrine device pricing relates to the near monopoly Mylan holds in the marketplace. “Here is but another example of a lifesaving drug that you have to have – if you don’t have it you’re going to die – and there’s no competition,” said Chaffetz.
The committee called Dr. Douglas Throckmorton, deputy director for regulatory programs with the Food and Drug Administration, to testify about the prospects for rival epinephrine devices in the near future. (Currently there is a generic version of the Adrenaclick injector, but it is not widely available.)
Chaffetz asked Throckmorton directly: “how many epinephrine products are in the queue right now?” The committee chair seemed frustrated when Throckmorton said he could not legally respond due to the confidentiality of commercial information contained in drug applications.
Mylan also faces investigations over whether its auto-injector has been classified incorrectly as a generic under Medicaid programs and whether the company should be paying a higher level of rebates to state health plans.
Hearing part 1:
Hearing part 2: