Mylan CEO Bresch Admits 'Full Responsibility' For EpiPen Price

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Arlene Weintraub ,
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I cover the science and business behind drug development and health

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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 Summit. (Stephen Kang/Pete Kolonia
for Forbes)

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."

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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.”

I am the author of the book Heal: The Vital Role of Dogs in the Search
for Cancer Cures