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Mylan Essay

Kameron Couts

OBHR 3311.002
Professor Meda
September 23, 2016
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Table of Contents

Page

Title Page 1

Table of Contents 2

Introduction 3

Steady Rise in Price of the EpiPen 3-4

Increase in Compensation for our Top Executives 4-5

Family Matters 5-6

The Issue of Corporate Social Responsibility 6

The FDA and Other Drugs Similar to EpiPen 7

Holding Heather Bresch Accountable for her Actions as CEO 7-8

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Introduction
As a member of the Board of Directors of Mylan, I am writing this paper with hopes to
encourage the leaders of our company to come up with a plan that will allow us to undo the
mess we have orchestrated before we pass into the point of no return. As you all know, our
company is being scrutinized due to questionable business decisions in relation to our EpiPen
product. The media is coming at us from all angles, many U.S. citizens are outraged with the
way we have handled the issue and our CEO (Heather Bresch), is front and center of the affair.

Obviously, as Chief Executive Officer of Mylan, Heather has played a significant role in
this fiasco. I think it is extremely important that we acknowledge the reality that our CEO has
unfortunately made a series of poor decisions which have resulted in a dark cloud of negativity
following our corporation. We need to analyze this situation in depth to understand the
motives involved, and to take the corrective steps to climb out of this mess.
Again, the character and integrity of our company has been jeopardized, and it is critical
that we take this controversy seriously. EpiPen is a life-saving product that is truly a powerful
blessing for thousands of families and individuals across our nation. Lives of Americans are
being saved because of our product. We have the potential to make a lasting, incredibly
positive impact in our nation. It is absolutely crucial that we center our recovery strategy
around this cornerstone piece of our company.
Steady Rise in Price of the EpiPen
This leads me into the first topic I would like to discuss. A focus of the controversy
surrounding Mylan has been the steady rise in price of the EpiPen. Over the course of the past
decade, the price of our EpiPen two-pack has increased over 600 percent from $94 in 2007 to
$609 in 2016. See graph below:

While the high-ticket price may not be an issue for people with insurance plans that
allow them to pay a low co-pay, many are not so fortunate in this respect. Those who do not
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have the luxury of low co-pays could end up paying a large deductible before their insurance
kicks in, which means paying over $600 out-of-pocket for EpiPen. The public is perfectly aware
that is only costs $30 or less for us to manufacture EpiPen. This general knowledge has only
added fuel to the fire of those people who are infuriated by the steady price increase. In my
opinion, this frustration is entirely justified.
To make matters worse, essentially the same product costs consumers less than $100 in
many other countries. According to an article on Forbes.com, one enterprising person on
Twitter noted that several versions of the EpiPen are available for purchase online in Canada for
$50 to $118. I realize that we face virtually no competition in the United States in respect to
the EpiPen. Does this make it right to raise the price again and again, just because we can? I
mean no one is going to compete with us, so we can charge whatever price we want right?

We must put ourselves in the shoes of those in need of EpiPen who cannot afford the
high price of a product that can potentially save their life or the life of a loved one. In their eyes,
they see Mylan as a company controlled by a greedy appetite who is willing to stop at nothing
when it comes to increasing profit margins. Instead of focusing on large profit margins, we
should be focusing on saving a large number of American lives. Just imagine the reputation
Mylan would have if saving as many lives as possible were our focus.
Our company is now being viewed as a business who does not take the value of human
life into consideration. As far as the public is concerned, our number one motive is not to help
save lives, but rather to make as much profit as possible. It goes without saying that profits
should never be more significant than saving a human life. Our company, and more specifically
our leader, should be utterly displeased that we are being viewed from this lens.
Increase in Compensation for our Top Executives
Society has gained some very strong negative opinions of our business. The dramatic
price increase of EpiPen to over $600 for a two pack that contains about $2 worth of
epinephrine is just the beginning. Additionally, EpiPens rise in price has correlated directly with
an increase in compensation for Mylans leader.
In 2007, we acquired the epinephrine auto-injector, which was apparently not such a
hot product. However, EpiPen sales began to skyrocket, and today it represents about 40
percent of our operating profits. As sales increased, price of the EpiPen increased, and the
salaries of our top executives increased. The EpiPen has seen a 600 percent price increase since
2007, and the salary of Heather Bresch has followed suit increasing roughly 671 percent over
the past decade. Forbes has listed Bresch as #95 on its 2016 Worlds 100 Most Powerful
Women list. The New York Times has Bresch on its list of top-paid CEOs for 2015 across all
industries, earning $18.2 million in 2015 and a staggering $24.3 million in 2014. FiercePharma
puts her at number 6 in their list of the top 20 pharma CEO earners for 2015 and gives her
earnings as $25.82 million.
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Salaries also increased for other executives in our company, but the increases were
substantially less in proportion. You may be thinking that the increases in salaries for Bresch
and other executives are justified because, after all, Heather is the leader who facilitated
Mylans increased profits over the past ten years. She deserves these millions of dollars now
right? There is one glaring issue with this perspective. Pharmaceutical companies have been
known to be perceived by the public as companies whose sole motivation is greed and making a
profit.

Now imagine for a moment that a single-mom, lets call her Kathy, has the perception of
pharmaceutical companies stated in the paragraph above. Imagine that Kathy has a child who
suffers from severe, life-threatening allergies. Kathy lives paycheck to paycheck, barely making
enough to pay her bills on a monthly basis. Before the prices of EpiPen increased significantly,
Kathy was able to keep an emergency pack of the epinephrine on hand, but now that it costs
over $600 she simply cannot afford the product anymore.
Along with the price of EpiPen increasing again and again, Kathy sees that the Heather
Breschs salary is increasing at the same rate. Kathy begins to resent Mylan and its leader for
hiking up the price of EpiPen to make more money for themselves. She feels that Mylan and its
leader care more about making money than heling to save lives of their fellow Americans. In my
eyes, Kathys resentment is absolutely justified. Even more so, if she were to lose a child as a
result of the product being too expensive.
The price of EpiPen and Heathers salary are steadily increasing with no end in sight.
How long are we going to continue to sit back and watch this go on? Is society right? Do we
truly care more about making as much profit as possible than saving human lives? All the
evidence is pointing to the notion that we do value dollar signs more than human life. This is
not justifiable behavior in any way. It is critical that we take corrective action before more
American lives are lost that could have been saved.
Family Matters
Furthermore, the public is also suspicious of the idea that Breschs parents may have
helped Heather by playing a role in the EpiPen scandal. Heathers father is a U.S. Senator out of
West Virginia. While there is currently no proof, people skeptical about his direct or indirect
involvement in campaigns that assisted in surging the sales of EpiPen, that doesnt necessarily
mean that he didnt play a part in the matter.
On the other hand, USA today reported that Heathers mother, Gayle Manchin,
spearheaded an unprecedented effort that encouraged states to require schools to purchase
medical devices that fight life-threatening allergic reactions like EpiPen when she became the
leader of the National Association of School Boards in 2012. The organizations maneuver
assisted our company to establish a presence in nearly all of the school nurses offices. Eleven
states proposed laws requiring epinephrine auto-injectors. Almost all of the remaining states
advised schools to keep them on-hand as a result of the EpiPen Law passed in 2013, giving
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funding preference to those schools who maintained a stock of EpiPens. This series of events
tends to raise all kinds of red flags about the practice of ethics. What went on behind closed
doors to help facilitate all of this? Was money handed under the table to important players? It
sure seems as though some very questionable practices took place, and once again its centered
around our CEO and her family.
Obviously EpiPen generating sales through the education system is great for business
when looking simply through the lens of sales and profit, but we have to be aware of the
indirect effects of plays such as this. We are taking heat from all angles with the recent media
attention. In addition to everything else we are being scrutinized for, the issue of our CEOs
parents being involved in our seemingly unethical moves is now a topic that is being
investigated. Even if all we are doing is in fact ethical, we have to be careful to not give the
impression that we are acting unethically. If people get the idea that we are acting unethically,
it will quickly create negative publicity, hurt our reputation, detract from our brand and likely
spur a snowball of many other undesirable effects.
The Issue of Corporate Social Responsibility
Simply put, corporate social responsibility is the conscious effort to do the right thing. At
Mylan, we are a high-profile company, and it is absolutely imperative for us to maintain a high
level of corporate social responsibility if we hope to be a successful and sustainable company.
Due to the dark cloud surrounding the EpiPen scandal, many people in society are now also
viewing our business negatively in respect to corporate social responsibility. According to CNN,
since 2009, Mylan has jacked up the price of the lifesaving allergy treatment an incredible 15
times. The list price on a two-pack of EpiPens is $609, up 400% from seven years ago.
Again, the situation we are faced with is about way more than an opportunity to make a
profit. We are a for-profit business whose overall goal is obviously to make money; however, we
must do this in a socially responsible way. Id like to emphasize the fact that we have a product
that saves lives. This means if people cant afford to purchase our product, people die. Do we
want people to die? Obviously not, but our actions related to the EpiPen may say otherwise. Once
more, society is now perceiving us as a business who cares more about our profits than the lives
of our fellow Americans.
In my opinion, we should be giving this product away to those who cannot afford it.
Imagine how the public would begin to perceive our business if we chose to act with corporate
social responsibility by forgetting about profits for a moment, and instead, began to focus on
truly helping those people in need. I think it would be such a powerful practice that it would gain
national media attention, but instead of the publicity being negative like it is now, it would shift
to hugely positive.
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The FDA and Other Drugs Similar to EpiPen

EpiPen is a name brand version of the antidote for life-threatening allergic reactions, but
what about the generic version? One would think that an easy solution to people not being able
to afford the life-saving prescription would be to seek the generic version. Theres only one
problem with that. There is currently no generic version of the EpiPen. According to the Generic
Pharmaceutical Association, as of July 1, the FDA had 4,036 generic drug
applications awaiting approval, and the FDAs average wait time to approve a new generic drug
is almost four years.
The U.S. Senate is concerned that our business has not faced much competition in respect
to EpiPen. In fact, the term monopoly has come up in discussions related to the EpiPen because
of the utter lack of competition. Although there are potential competitors awaiting approval by
the FDA, there is no telling if or when they will enter the marketplace. This situation begs the
question, why not fast-track drugs similar to EpiPen through the approval process? I definitely
think something needs to be done increase the speed and efficiency of the approval process of
generic drugs that have the ability to save lives.
Even though the idea of generic drugs competing with EpiPen would not be beneficial to
our companys bottom line, I maintain the opinion that we must leave this world a better place
than the way we found it. If that means making a smaller profit-margin because of generic
competitors, then so be it. We must collaborate with the appropriate organizations in order find
a way to fast-track generic, life-saving medicine through the currently lengthy approval process.
I cannot emphasize the importance of saving a human life enough. A price really cannot be placed
on the value of a person being able to save the life of a loved one.
Holding Heather Bresch Accountable for her Actions as CEO
Let us not forget that this isnt the first time that our CEO has faced scrutiny from the
media. According to Fortune, in 2008, it was discovered through an investigation that West
Virginia University has falsified transcripts for Heather by pulling grades out of thin-air. The
investigation concluded by stripping Bresch of her MBA, but didnt directly fault Bresch or her
family. In addition to the scandal costing Bresch her degree, it also meant three school officials
would lose their jobs. Bresch took no responsibility for playing any part in the ordeal, and stated
that she did everything she needed to do to get her degree.
Since the EpiPen has started creating negative publicity for Mylan, CEO Heather Bresch
has been in the hot seat once again. People are accusing her of being greedy, solely profit-driven,
and lacking empathy for fellow Americans. In light of all the recent accusations, Heather has not
taken any responsibility for her actions. Instead, she persistently defends the price-hike of
EpiPen, placing the blame on external factors such as a broken healthcare system.
Its blatantly obvious that on multiple occasions Heathers actions, have attracted a lot of
negative attention to our company. At what point do we say enough is enough and cut ties with
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her? I think there is no better time than now. If we continue to allow this unacceptable behavior
by our leader, the rest of our staff will observe this and begin to think that they can start acting
in unethical manners as well. We need a new CEO who will lead our organization by example,
through strong values, morals and an exceptional practice of ethics.
It pays to be ethical, and it costs to be unethical. If we have any hope to dig ourselves out
of this hole Heathers poor leadership has got us in, we have to look at the big picture of Mylan
right now. If we would be willing to invest some time and resources in recruiting and talent
acquisition, we would more than likely run into one of the top talent professionals in society or
even better, in our own organization. With some persistence and determination in searching for
a qualified candidate, we quite possibly would find someone who would jump at the opportunity
to help innovate company culture and business practices that would result in facilitating the
revitalization of our corporation. We must confront this issue now before any more damage is
inflicted. Heather Bresch is not characteristic of someone we want to be the face of Mylan, and
it is time to send her packing.
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References
http://time.com/money/4502891/epipen-pricing-scandal-big-pharma-politics/

http://time.com/money/4481786/how-much-epipen-costs-to-make/

http://www.forbes.com/sites/matthewherper/2016/08/30/the-consumer-rip-off-at-

the-heart-of-the-epipen-scandal/2/#62117c887187

http://www.bloomberg.com/politics/articles/2016-08-24/the-senator-s-daughter-who-

raised-prices-on-anti-allergy-epipen

http://247wallst.com/healthcare-business/2016/08/24/more-concerns-persist-on-

mylan-epipen-price-gouging-or-do-they/

http://www.usatoday.com/story/news/politics/2016/09/20/family-matters-epipens-

had-help-getting-schools-manchin-bresch/90435218/

http://money.cnn.com/2016/08/29/investing/epipen-price-rise-history/

http://www.npr.org/sections/health-shots/2016/09/01/492235796/fda-fees-on-

industry-havent-fixed-delays-in-generic-drug-approvals

http://fortune.com/2016/08/26/epipen-mylan-ceo-interview-heather-bresch-mba/

http://www.forbes.com/sites/emilywillingham/2016/08/23/ceo-of-mylan-

pharmaceuticals-sees-671-salary-increase-in-8-years/#dab6bf14b236