Meet The New Martin Shkreli, Whom Shrekli Himself Calls a “Vulture”!
Mylan has raised the cost of life-saving EpiPens by 400%
Over the past few years, the drug company Mylan, which has a monopoly on life-saving EpiPens, has been charging more and more for them. They now retail for over $500 each, even though they’re quite cheap to produce and most patients are advised to carry two. Perhaps the company was operating on the logic of that fable about the frog and the hot water, that if you put a frog in boiling water, it will jump out, but if you put it in tepid water and increase the heat slowly, the frog will let itself die.
But, as Kermit would say, that is a myth. MYTH. It doesn’t hold true for frogs, which will apparently scramble out of a pot of water when it becomes uncomfortably warm, and it definitely doesn’t hold true for parents, who, when they realize are being asked to spend a thousand dollars for vital medicine for their kids that, on top of everything else, expires quickly, will indeed raise a ruckus.
EpiPen’s 400 Percent Price Hike Has Parents Scrambling
Legislators have weighed in. (“Shocking!”) Bernie Sanders has weighed in.
There’s no reason an EpiPen, which costs Mylan just a few dollars to make, should cost families more than $600.http://nbcnews.to/2b3PH80
Now, NBC News reports, even embodiment of human sliminess Martin Shkreli has weighed in, calling the corporate heads of Mylan “vultures.”
Even 'pharma bro' calls EpiPen price hikers 'vultures' amid backlash
Maybe he’s annoyed he didn’t think of it first?
Before you start carping about how Mylan probably invested millions of dollars to create the EpiPen and needs to recoup its costs, read this brief history of the drug.
It was invented by a NASA engineer named Shel Kaplan. It seems clear he’s not seeing any of these vastly inflated profits.
Let’s get to know our bad guys! Mylan was founded half a century ago in West Virginia. Its integrity statement reads as follows:
Doing what’s right is sacred to us. We behave responsibly, even when nobody’s looking. We set high standards from which we never back down. This uncompromising ethical stance helps to keep our products pure, our workers safe and the environment clean.
To be fair, it doesn’t say anything specifically about not price-gouging.
The company is now international but based in Pennsylvania, and it’s led by an executive team that includes Robert J. Coury. Over the past few years, Coury has taken Mylan on a shopping spree.
Since 2007, Coury has led the company through a series of transactions totaling approximately $15 billion, which transformed the company into a global powerhouse within the highly competitive pharmaceutical industry. In 2007, Mylan purchased India-based Matrix Laboratories, a major producer of active pharmaceutical ingredients, and the generics business of Europe-based Merck KGaA. Subsequent acquisitions under Coury’s leadership further expanded the company into new therapeutic categories and greatly enhanced its geographic and commercial footprint. For instance, in 2010, Mylan acquired Bioniche Pharma, an injectables business in Ireland, and in 2012, Mylan acquired India-based Agila Specialties, a global injectables company. Most recently, the company completed its acquisition of Abbott Laboratories’ non-U.S. developed markets specialty and branded generics business.
EpiPen was one of the Merck generics that Mylan decided to turn into a billion dollar business. Bloomberg reported on this development last year.
How Marketing Turned the EpiPen Into a Billion-Dollar Business
At first, Mylan didn’t realize it was sitting on a gold mine.
Management first thought to divest the aging device, which logged only $200 million in revenue. Then Heather Bresch, now Mylan’s chief executive officer, hit on the idea of using old-fashioned marketing in part to boost sales among concerned parents of children with allergies. That started EpiPen, which delivers about $1 worth of the hormone epinephrine, on a run that’s resulted in its becoming a $1 billion-a-year product that clobbers its rivals and provides about 40 percent of Mylan’s operating profits, says researcher ABR|Healthco. EpiPen margins were 55 percent in 2014, up from 9 percent in 2008, ABR|Healthco estimates.
Bloomberg’s write up is admiring of the company’s savvy but adds, “The price increases are among the biggest of any top-selling brand drug, according to DRX, a unit of Connecture that tracks drug pricing.”
It goes on:
The CEO has made no secret of her strategy to increase demand for EpiPens by getting them stocked for emergency use in more schools and other public places. (So-called entity prescriptions allow for this.) “We are continuing to open up new markets, new access with public entity legislation that would allow restaurants and hotels and really anywhere you are congregating, there should be access to an EpiPen,” Bresch said at a conference on Sept. 17. …
In 2010 new federal guidelines said patients who had severe allergic reactions should be prescribed two epinephrine doses, and soon after Mylan stopped selling single pens in favor of twin-packs. At the time, 35 percent of prescriptions were for single EpiPens. The U.S. Food and Drug Administration had changed label rules to allow the devices to be marketed to anyone at risk, rather than only those who’d already had an anaphylaxis reaction. “Those were both big events that we’ve started to capitalize on,” Bresch said in October 2011.
“Capitalize on” indeed. EpiPens used to cost $57. In places like France, they still do: the equivalent of $85 would get you two in Versailles. But here? The company can get away with charging vastly more, so that’s what it does. Mylan’s impressively successful lobbying efforts — which are perhaps connected to the fact that Bresch is the daughter of a Senator from West Virginia — have ensured that schools and other institutions have to stock the drug, and a two-pack at that. No wonder that last year revenue for EpiPen alone surpassed $1 billion.
So our new Martin Shkreli could be CEO Heather Bresch, or it could be Chairman of the Board Robert Coury. We need a villain, right? There has to be some greedy, morally bankrupt bad actor we can point our fingers at, hiss at, blame. Otherwise we have to accept that the real enemy is unconstrained late-stage capitalism, a system by which everyone is encouraged, even expected by shareholders, to make as much money as possible, no matter what.
Why Did Mylan Hike EpiPen Prices 400%? Because They Could
Until we get over our fears of big government and socialized medicine and institute sensible regulations like price controls on health care, big pharma will keep testing the limits. They will continue profiting at our expense and, yes, even at the cost of our children’s lives.
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