Mylan CEO blames ‘opaque’ pharma supply chain, pricing for EpiPen hikes
Members of Congress don’t believe Mylan CEO Heather Bresch’s claim that the company makes only $50 profit per EpiPen, an auto-injector for allergic reactions which has shot up 400 percent in price since Mylan started selling it.
In a highly contentious hearing Sept. 21, Bresch was grilled by lawmakers on how the massive price hike could be justified. Bresch put the blame on “opaque and frustrating” pricing structure and supply chain in the pharmaceutical industry for creating a “misconception” about how much Mylan makes off EpiPens.
“In the complicated world of pharmaceutical pricing there is something known as the Wholesale Acquisition Cost or WAC,” Bresch said in her prepared remarks to the House Oversight and Government Reform Committee. “WAC for a two-unit pack of EpiPen Auto-Injectors is $608. After rebates and various fees, Mylan actually receives $274. Then you must subtract our cost of goods which is $69. This leaves a balance of $205. After subtracting all EpiPen Auto-Injector related costs our profit is $100, or approximately $50 per pen.”
Members of both parties questioned how that could be the case. Rep. Jason Chaffetz, R-Utah, chairman of the committee, said he didn’t believe Bresch, calling her profit explanation “fishy business.”
As reported by The Hill, one Democrat on the committee referenced a report saying Bresch’s mother, Gayle Manchin, wife of Sen. Joe Manchin, D-West Virginia, helped boost Mylan’s sales by lobbying state legislators to pass laws mandating schools buy devices like EpiPens.
“Your own mother is lobbying to make sure they’re in your schools,” said Rep. Tammy Duckworth, D-lllinois.
Bresch denied those claims, saying, “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.”
Lawmakers repeatedly questioned why EpiPen was paying Medicaid programs generic-level rebates, despite being a branded drug, and chastised Bresch for supposedly not providing all the financial data they had requested. The hearing ended with the ranking Democrat on the committee, Rep. Elijah Cummings, D-Maryland, said Bresch would’ve been better off not saying anything.
“I don’t think you're being frank with us,” he said.
John joined TriMed in 2016, focusing on healthcare policy and regulation. After graduating from Columbia College Chicago, he worked at FM News Chicago and Rivet News Radio, and worked on the state government and politics beat for the Illinois Radio Network. Outside of work, you may find him adding to his never-ending graphic novel collection.