Mylan CEO Heather Bresch testified before Senate yesterday after the Oversight and Government Reform Committee expressed concerns about the company’s price increases of its epinephrine auto-injector.
Since Mylan (NSDQ:MYL) acquired the EpiPen from Merck in 2007 it has raised the price 17 times, from $100 in 2008 to nearly $600 today – a price increase of 548%.
In August, Sens. Amy Klobuchar (D-Minn.) and Charles Grassley (R-Iowa) pressed Mylan to release a cost analysis of the device. Klobuchar also penned a letter to the U.S. Federal Trade Commission to investigate whether Mylan violated antitrust laws.
Presidential candidate Hilary Clinton criticized Mylan for not being transparent with patients. “That’s outrageous – and it’s just the latest troubling example of a company taking advantage of its consumers,” Clinton said in a statement. “It’s wrong when drug companies put profits ahead of patients, raising prices without justifying the value behind them.”
Mylan’s shares dropped 10% to $42.64 apiece when the criticism began in August. The stock was trading at $43.12 per share in mid-morning activity today, up 2.88%.
Testifying before the Senate, Bresch said Mylan has given away thousands of EpiPens to schools and patients. She also pointed to the $300 generic version of the device that Mylan is making, but Committee Chairman Jason Chaffetz was skeptical.
“Suddenly feeling the heat Mylan has offered a generic version and cut the price in half, so that does beg the question what was happening with that other $300?” Chaffetz asked.
When Mylan announced in August that they would expand their patient assistance program, Rep. Elijah Cummings (D-Md.) called the move nothing more than a public relations stunt.
“After Mylan takes our punches they’ll fly back to their mansions in their private jets and laugh all the way to the bank,” Cummings said at the hearing.
The committee called on the FDA to speed up approval of generic versions of the EpiPen. Teva Pharmaceuticals (NYSE:TEVA) said in February that the FDA rejected its application for a generic device. Last week Teva said that it hopes to win U.S. approval for its version of Mylan‘s EpiPen by late 2017 or early 2018.
Bresch maintains that the price of the EpiPen is justified, given the work they’ve put into improving the device since 2008. “I think many people incorrectly assume that we make $600 off each pack. It’s simply not true,” Bresch said. “I think what is incorrectly assumed is that $608 is what Mylan received. We receive $200.”
But representatives on both sides of the aisle argued that the price could prevent people with fatal allergies from getting the treatment they need and that Mylan’s pricing strategy is unclear.
“Your numbers don’t work based on the documents you’ve given us,” Rep. Stephen Lynch (D-Mass.) said.
At the closing of the hearing, representatives pressed Mylan to release company contracts with manufacturers, suppliers, and other partners.
“They’re just begging us to look deeper,” Chaffetz said following the hearing.
The hearing follows a USA Today report claiming that Bresch’s mother and former president of the National Association of State Boards of Education Gayle Manchin pushed state lawmakers to support legislation that mandated schools to buy epinephrine devices like the EpiPen in 2012.
“While people may want to criticize Mylan for giving away free pens … I thought it was a very cheap shot to bring my mother into this,” Bresch said.