Wednesday, August 24, 2016

Nice work if you can get it


Anybody who needs to keep an EpiPen knows what a life saver it can be. And now they are learning how expensive they can be despite the lack of any improvement in the product. As small consolation, EpiPen users are only one of 20 Mylan drugs that have taken a huge jump in price.
The executive of the pharmaceutical company that hiked the prices of two dozen drugs, including EpiPen, received a 671% pay increase over the past nine years.

Heather Bresch, chief executive officer of Mylan, came under public scrutiny this week after reports that since acquiring rights to EpiPen in 2007, the company had implemented a series of gradual price increases inflating the price of the drug from $56.64 to $317.82, a 461% increase in cost . During that same time, Bresch went from being Mylan’s chief operating officer to president to chief executive and saw her pay rise $2,453,456 to $18,931,068, a whopping 671% increase.

When Mylan first acquired Merck KGaA in 2007, Bresch oversaw the integration of its 400 products. Among those products was EpiPen, which is used to quickly deliver a proper dose of epinephrine to those suffering from anaphylaxis. Anaphylaxis is when an allergic reaction causes one’s airways to swell and close. In a 2015 interview with Fortune, Bresch described EpiPen as “my baby”. Under her management, EpiPen went from bringing in $200m a year in sales to becoming Mylan’s first billion dollar product.

Following the outcry over the increase in EpiPen’s prices, Bresch, who is the daughter of West Virginia Senator Joe Manchin, could be called on to justify Mylan’s pricing before the US Congress. Her father does not sit on the Senate judiciary committee, who would most likely hear her testimony.

Mylan has hiked prices of other products as well, according to a June report by a Wells Fargo senior analyst David Maris.

“Mylan has raised the prices more than 20% on 24 products, and more than 100% on seven products,” he wrote.

Among the products whose prices were hiked over the past six months were:

Ursodiol, a drug used to treat gallstones, saw its price increase by 542%
Dicyclomine, a drug used to treat irritable bowel syndrome, saw its price increase by 400%
Tolterodine, a drug used to treat overactive bladders, saw its price increase by 56%

The Guardian has reached out to Mylan to confirm these hikes.

In his report, Maris noted that the price hikes could draw “greater regulatory scrutiny and headline risk”.

“Mylan’s business model is not today, nor has it ever been, premised on price hikes,” Nina Devlin, Mylan’s spokeswoman, said in June. She described Maris’ analysis was “flawed” and focused on a small selection of its 1,400 plus products.
Having daddy in the Senate will certainly make any inquiry less onerous than ordinary civilians would expect. And while there may be no improvement to the product, there is a most definite improvement to Ms Bresch's compensation as she has increased it $16 Million.

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