"US taxpayers may have overpaid for Mylan NV’s EpiPen shot by as much as $1.27 billion over the last decade, according to a US government report. Senator Charles Grassley, an Iowa Republican, on Wednesday posted a copy of a report by the Department of Health and Human Services’ Office of the Inspector General. The report says that Mylan, by classifying EpiPen as a generic drug rather than a brand-name product, shortchanged the Medicaid program for the poor. Under Medicaid, makers of brand-name drugs must provide deep discounts on their products. In October, Mylan said it reached a settlement with the US to pay $465 million for misclassifying the drug as a generic product, which doesn’t require the same discounts. Grassley has been critical of the October settlement, calling it too small."
They were probed over cost of EpiPen shots, but with no competition the prices soared and they paled in comparison to huge increases that Mylan Laboratories took on dozens of other medicines that may have violated antitrust laws-- “it’s like the bank robber saying ‘Don’t worry, we don’t rob banks anymore” -- as the hands of Hillary Clinton scrubbed clean.
Mylan won either way:
"How the generic EpiPen could actually be more profitable for Mylan" by Damian Garde, August 29, 2016
In the latest twist on the EpiPen saga, drug maker Mylan appears to have figured out a way to make more money on the product — while chopping the price in half.
Mylan’s new plan is to sell a generic version of its EpiPen directly to consumers, in what CEO Heather Bresch called an “extraordinary commercial response.” The new product, expected in the coming weeks, will be identical to EpiPen except for the label, and will sell for $300 for a two-pack — about half the cost of the EpiPen.
Here’s what we know about the move:
Why would Mylan do this?
The tactic might help quell a bit of the public furor over rising EpiPen costs.
It could also be a savvy business move.
Last week, Bresch took pains to explain that Mylan actually makes just $274 from each $608 pack of EpiPens it sells, because the product winds through a long line of middlemen before reaching the consumer.
Cutting out the middlemen to sell directly to patients means that Mylan can pocket the full $300 price — and may actually make as much as $26 more on the generic for every unit it sells, depending on the cost of shipping and manufacturing.
Even if Mylan does send some generics through the traditional supply chain, the move will help it box out competition from other generic drug makers, and the lower cost could boost sales, as patients who limited their EpiPen purchases because of the high cost might feel more comfortable buying another kit to have on hand in case of emergency.
Does it make a difference for patients?
Arguably.
How will this affect competition?
Here’s where it gets interesting.
Can you just launch a generic without FDA approval?
You can if it’s identical.
Does this mean Mylan’s in the clear?
Probably not....
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Just one more way to game the system, along with the stealth ad campaigns and shell game at everyone's expense:
"EpiPen maker games the system, at everyone’s expense "August 24, 2016
The spiraling price of the EpiPen injector — a staple of backpacks and school nurses’ offices everywhere — is only the latest version of a destructive story: A drug company scoops up the rights to a medicine that’s been around for years, concocts an aggressive new business plan, and inflates the price by an obscene amount. Remember Martin Shkreli, who increased by 5,000 percent the cost of a 62-year-old pill to treat parasitic infections?
Yes, I do remember him, do you?
The recent $100 price hike for the EpiPen, a device that conveniently delivers the drug epinephrine to counteract severe allergic reactions, isn’t quite as steep. But the basic strategy is just as shameless.
The patent holder Mylan, which acquired the rights to EpiPen from Merck KGaA in 2007, isn’t using its new revenues to invent new ways of saving lives. The device isn’t getting any harder to manufacture. The epinephrine inside it only costs about $1. The company is just padding its margins by gaming the insurance system and exploiting other inefficiencies in US health care — at the expense of patients and everyone else who pays health care premiums.
Developing a new drug or device requires exhausting research and hundreds of millions of dollars, with slim odds of success in the end. It’s simpler to purchase an existing product, generate more volume through slick marketing, and then squeeze more money out of customers. In real dollars, the EpiPen’s price has risen by about 450 percent since 2004, to $600 or more for a pack of two.
For those allergic to bee stings or certain foods, the EpiPen can be a lifesaver. That makes it an easy sell. It lands on many back-to-school shopping lists, and it’s pitched as “the brand more school nurses have been trained on and taught to administer.” Mylan sold 3.6 million EpiPens in 2015, reaping more than $1 billion, and it will likely unload at least that many this year — the injectors are supposed to be replaced every 12 months.
Mylan lucked out last fall when global drug giant Sanofi had to recall its competing device, and again when the Food and Drug Administration rejected a generic version of the EpiPen. In general, the FDA’s progress in reviewing generic drugs has been slow — a boon to patent holders like Mylan, because long regulatory delays discourage companies from trying to bring new generics to market. The lack of competition has allowed Mylan to raise the EpiPen’s price repeatedly, with no repercussions.
The company also has used the impenetrable health insurance system to disguise the EpiPen’s actual cost. In a statement in response to mounting criticism, Mylan said this week that “nearly 80 percent of commercially insured patients” who used a company-supplied copay coupon last year received an EpiPen “for $0,” but it’s a deceptive deal, as insurers still pass on the costs through more expensive premiums for all.
If nothing else, Mylan’s scheme becomes harder to conceal as more Americans shift to plans with big deductibles and copays. In the long term, the Affordable Care Act should reduce the perverse incentives within the insurance system — if Congress builds on the law’s reforms, rather than whittling them down. Lawmakers can also help the situation by giving the FDA the direction and the funding necessary to speed up the introduction of generic drugs of all sorts.
In the short term, Mylan needs to hear from angry consumers and from the pols who represent them. As it happens, Mylan’s chief executive, Heather Bresch, is the daughter of Senator Joe Manchin of West Virginia, but that shouldn’t get the company off the hook. Senator Amy Klobuchar, a Minnesota Democrat, wants a Federal Trade Commission investigation into the EpiPen episode. Senator Chuck Grassley of Iowa is demanding that the company explain its actions. In the court of public opinion, “we did it because we could” just doesn’t cut it.
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"The EpiPen was her ‘baby.’ Now this pharma CEO is in the hot seat over price hikes" by Damian Garde, August 24, 2016
Drug company CEO Heather Bresch affectionately describes the humble EpiPen as her “baby,” a once-middling product that she turned into a blockbuster.
With aggressive advertising — and even more aggressive price hikes — Bresch has fostered the EpiPen into a bestseller that brings in more than $1 billion a year in revenue for Mylan Pharmaceuticals, but the growing furor over drug pricing threatens to turn Mylan’s biggest asset into a liability, and it has forced Bresch into an unwelcome spotlight, as anxiety over the rising cost of medicine has drug industry critics seeking out the next Martin Shkreli.
In the past week, Mylan has faced public scorn, investor skepticism, and castigation from a group of senators calling for an investigation into why EpiPen’s cost has soared fivefold under Bresch’s watch. Even Shkreli, widely perceived as a paragon of greed after hiking a drug price by 5,000 percent, decried Mylan as a group of “vultures.”
The EpiPen, an auto-injector used to reverse life-threatening allergic reactions, is inextricably tied to Bresch, whose ascension at the company tracks with the product’s rapid growth.
The reason the product is needed is because of the multitude of vaccinations kids are subjected to these days. The allergies come from the adjuvants they contain to get your body to accept the needed poisons.
At 47, Bresch has spent most of her life at Mylan, working her way up from a secretarial desk in the basement of what was then a small West Virginia firm. In the ensuing years, Bresch has overcome an academic scandal, hostile takeover attempts, and questions about her true control over Mylan.
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She has also become one of the drug industry’s highest-paid CEOs, pocketing more than $18 million in cash and stock last year, and sitting at the head of a $26 billion enterprise.
Now, as the specter of a Senate investigation looms, Bresch faces what could become her biggest challenge. And, befitting her uncommon career, it comes with a twist: Among the Senate’s membership is her father, Joe Manchin, a populist West Virginia Democrat whose influence is woven throughout her rise in the drug industry.
Bresch first adopted EpiPen in 2007, when Mylan purchased the generic drugs division of Germany’s Merck KGaA for $6.7 billion. It was a milestone for the growing company, and then-CEO Robert Coury appointed Bresch to sort out the integration.
EpiPen was one of about 400 products that Mylan acquired in the deal, and it was unremarkable in business terms: a plastic device that, with the push of a button, injected what Bloomberg has estimated to be about a dollar’s worth of the generic hormone epinephrine to treat deadly anaphylactic shock. It sold for about $57 and made just $200 million a year for Merck KGaA, accounting for less than 5 percent of the company’s generics revenue at the time.
Bresch saw potential in the decades-old auto-injector, and Mylan credits her with spearheading an effort to widen its use, but her drive to make the EpiPen a top seller was almost derailed before it started.
Bresch was promoted to chief operating officer at Mylan shortly after the deal with Merck KGaA. The official corporate announcement touted her MBA from West Virginia University. Months later, an exhaustive investigation by the Pittsburgh Post-Gazette revealed that she hadn’t finished the MBA program — and a later independent report found that university officials had falsified her transcripts to conceal that fact, adding in grades “pulled from thin air.”
Looks CRIMINAL to me.
The scandal shined a light on Bresch’s status as a member of coal country royalty. Her father, Manchin, was then West Virginia’s governor, and the university’s leadership included longtime family friends and Mylan insiders.
Bresch held onto her job at Mylan, maintaining that she had done everything she needed to do to earn that MBA. Neither she nor her father was accused of wrongdoing, but the episode reeked of cronyism and sparked a faculty protest. WVU’s provost and business school dean later resigned, and the university revoked Bresch’s degree.
Both Bresch and Mylan declined to comment. Manchin’s office didn’t return voicemails left Tuesday.
He is still a senator.
While the affair was embarrassing for the university, it had little effect on Bresch’s career.
Bresch soon became Mylan’s president and began a crusade to expand the availability of EpiPens. Drawing on her experience as Mylan’s former director of government relations, Bresch led a lobbying campaign to spread the word about the risks of anaphylaxis and the efficacy of EpiPen.
Mylan scored a coup in 2013 with the adoption of the School Access to Emergency Epinephrine Act, which gave preferential federal treatment to schools with EpiPen stockpiles. Sales increased, and Mylan raised the price of its banner product each year.
In 2011, Coury surprised Wall Street by announcing that he’d step down from the CEO role at year’s end, leaving Bresch as his anointed successor. It was to be a major culture shift for Mylan, which had become synonymous with Coury’s blunt, often profane way of conducting business. Bresch, with her lilting West Virginia accent and political savvy, presented a new way forward for a company that had underperformed in the eyes of many analysts, but Coury never really went away, instead taking on the title of executive chairman, and in the years since Bresch became CEO, it has often been unclear just who is pulling the strings at Mylan.
Last year, when Israeli drug maker Teva Pharmaceutical mounted a hostile takeover attempt, it was Coury who acted as Mylan’s mouthpiece, baiting the other company’s management team and penning a searing 3,000-word letter to its board. At the same time, he starred in Mylan’s failed attempt to acquire rival generics firm Perrigo, sparking a bitter public feud with that company’s CEO before eventually admitting defeat.
They helped block a Congre$$ional probe, and would it make you feel better if you knew they were in league with Pfizer and Moderna?
In Mylan’s last annual report, the opening note to shareholders is signed by both Coury and Bresch, and letters to the company end up at the Robert J. Coury Global Center, a 280,000-square-foot Pittsburgh outpost christened in 2013, but Bresch was front and center for Mylan’s most recent controversy, a politically sticky situation that again looped in her father.
In 2015, Mylan announced that it would move some of its operations overseas in search of a more favorable tax rate. The tactic, known as an inversion, exploits what President Obama has called “one of the most insidious tax loopholes out there.” For Mylan, inversion meant shifting its business address to the Netherlands through a complicated transaction with Abbott Laboratories.
Manchin, who learned of the move only on its official announcement, told The National Journal that what his daughter did ought to be illegal. (He later gave a statement to The New York Times saying Mylan’s move was “systemic of a larger problem with our corporate tax code that puts American companies at a disadvantage with their global competitors.”)
This put Bresch in an awkward spot. Mylan had long painted itself as a different sort of drug company, one principally concerned with stakeholders — like patients and employees — rather than the short-term profits of shareholders and investment banks, and Bresch had once been hailed by Esquire as a “patriot of the year” for her work to improve safety standards for generic drugs.
So why was her company leaving home in the name of corporate profits?
Bresch’s spin: Mylan needed to ditch the United States to stay in the US. Setting up shop in the Netherlands provided tax savings, sure, but it also gave Mylan the protection of Dutch law, which makes it easier for companies to fend off hostile acquisitions. At the time, Teva was trying to galvanize a shareholder revolt to depose Mylan’s management, something Bresch said could have imperiled patients and employees.
I'm convulsing at the sophistry!
“I said, ‘You know, Dad, we have 5,000 employees in Morgantown, W.Va. — we’re one of the largest employers in West Virginia,’” she told an audience at Fortune’s Most Powerful Women Summit in 2015. “I can guarantee you, if we don’t protect ourselves, no one’s going to protect those jobs.”
Explaining EpiPen’s 450 percent price increase may prove more difficult, as the public outrage that once dogged Shkreli’s Turing Pharmaceuticals has shifted to Mylan.
Senator Amy Klobuchar (D-Minn.) has called for the Federal Trade Commission to investigate Mylan’s pricing practices, writing Monday that “not only is this alarming price increase unjustified; it puts lifesaving treatment out of reach to the consumers who need it most.” The same day, Senator Chuck Grassley (R-Iowa) wrote Mylan asking for information on how it set the price for its auto-injector, and Senator Richard Blumenthal (D-Conn.) called for the company to lower the cost of EpiPen.
Days before, Senator Bernie Sanders had tweeted that “there’s no reason an EpiPen, which costs Mylan just a few dollars to make, should cost families more than $600.” A MoveOn.org petition, titled Stop Immoral Price Gouging for Life-Saving EpiPen, had garnered nearly 19,000 signatures as of Tuesday night.
In a statement, Mylan defended its patient-access programs, which it said provide EpiPens for free to 80 percent of insured patients, but the company did not address price increases or their effect on patients without insurance.
Meanwhile, some shareholders are losing faith. The company’s stock price has fallen more than 30 percent since last summer, when Mylan finally shook off the threat of a takeover by Teva. In May, Goldman Sachs downgraded Mylan, citing a “cloud over generic drug pricing,” and on Tuesday, analysts from Citigroup warned that the current public focus on EpiPen pricing could weigh down Mylan’s stock, especially if the company has to appear before a Senate committee.
If Mylan loses too much value, it could struggle to defend itself from a future hostile takeover, but Bresch herself is well-insured: According to a recent analysis from Bloomberg, if she’s deposed in a merger, she’s in line for a $61.5 million golden parachute.
Time to bail out!
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Related:
Mylan CEO to appear before congressional committee on EipPen price hikes
She was rather quiet as she defending the pricing (so that is what $cum looks like) and lied about profits (I'm sorry, she was ‘‘intellectually dishonest’’ in her testimony, and isn't that lying to Congre$$ and a crime)?
"Heather Bresch was beaten up by Congress last week — and rightfully so. The Mylan Pharmaceuticals chief executive testified before a House committee investigating EpiPen price hikes, and her performance was largely dreadful. Although soft-spoken and respectful, she often dodged questions, and too many of the answers she did give were vague or hard to follow; nonetheless, the hearing may yet prove beneficial. Sadly, none of the committee members seemed prepared to press Bresch on the fine points of her pricing strategies, and that was a missed opportunity. “No one followed up, because everybody wants a show with grandstanding and finger pointing. So we didn’t come away with much insight,” said Pratap Khedkar, a managing principal at ZS Associates, a consulting firm to drug makers. So how could all that posturing actually be helpful? I say this because the committee reiterated its demand that Mylan fork over documents...."
She even lied about the price reduction as they continued to overcharged for the EpiPen after paying a $465m settlement to Medicaid and moved past the controversy to continue feasting at the public trough with a well-honed penchant for brazen envelope-pushing despite receiving repeated warnings from federal officials and possible violations of antitrust laws for exploiting taxpayers to the detriment of society at large and predilection for unfairly boosting its profits (it accounts for about 40 percent of Mylan’s operating profits) before blowing off the Senate.
After slashing prices (it still costs less than $10 to make one), some devices had to be recalled so her pay package was cut and House Democrats began a probe after a member got sick off a salad bought at Logan Airport before his Delta flight out of Bo$ton.
Also see:
Outrage over a drug price controversy building in Congress again
It's the exploitation that is causing it.
Drug industry group starts ad campaign to defend pricing
The an$wer to anything and everything is a PR campaign.
Yeah, go fly a Kite.
They were working on a vaccine, if you can believe it.
"Mylan misled investors over EpiPen pricing probe, SEC says" by Riley Griffin and Matt Robinson Bloomberg News, September 27, 2019
Mylan NV misled investors for at least a year about a Justice Department investigation into the allergy shot EpiPen that would eventually cost the company nearly $500 million, the US Securities and Exchange Commission said Friday.
Under the agreement with the SEC, first disclosed as a settlement in principle by Mylan in July, the drugmaker will pay $30 million.
The settlement appears to close one part of a long-running saga over a product that boosted Mylan’s sales but also brought controversy.
The SEC lawsuit details years of Mylan’s efforts to fight allegations it overcharged taxpayers, and then negotiating with the government over a settlement. Neither the investigation nor the potential settlement was disclosed to investors while those events were ongoing. The company in October 2016 announced a settlement with the Justice Department for $465 million.
“Investors were kept in the dark about Mylan’s EpiPen misclassification and the potential loss Mylan faced as a result of the pending investigations,” said Antonia Chion, associate director of the SEC’s Division of Enforcement.
The SEC settlement is the latest black eye for a company that’s no stranger to controversy.
EpiPen, the company’s best-selling product in recent years, attracted attention after the drugmaker raised the price for a two-pack of the pens to about $600. The company has also been dealing with supply shortages of the product, which is manufactured by a division of Pfizer, while also facing new competition from copycat products.
When selling the EpiPen to Medicaid, Mylan was required to rebate a portion of the sales to the government. By classifying EpiPen as a generic drug, Mylan paid much lower rebates, the agency said.
Mylan has been named in lawsuits by state attorneys general that accuse 20 drugmakers of conspiring to carve up the market and raise price on more than 100 generic drugs. Democratic members of Congress have said the company has stonewalled their inquiries into its conduct.
Mylan has said that it acted properly and that its executives did not conspire to fix prices. It has also said that it is cooperating with investigations. Pfizer and Mylan in July struck a deal to combine Mylan and Pfizer’s older-drugs business.
The EpiPen settlement relates to a complex program in Medicaid, the federal-state health program for low-income people, that’s meant to get the government deep discounts on drugs. Under the program, almost all drugs are subject to rebates to the government, but generics, which are typically lower-priced and have slim margins, pay a much smaller rebate than brand-name products.
Even though EpiPen faced little competition and the company had increased the price by hundreds of dollars, it had been classified as a generic product under the discount program. In 2013, the Centers for Medicare and Medicaid Services told Mylan that Epipen “has an incorrect drug category” in a government database, and that the company needed to verify and update the information.
Mylan’s justification for calling EpiPen a generic product was a 1997 letter from the government, but inside the company, executives raised doubts about whether the letter was sufficient, according to the SEC. The 1997 letter was “basically just done as a result of a conversation two guys who were there at the time had,” one Mylan executive said in an internal email, according to the SEC lawsuit. If there had been a new review, “they would have been denied given today’s market size and that ours was a loose interpretation to begin with,” said the executive.
In November 2014, the SEC said, Mylan received the first Justice Department subpoena as part of a civil investigation into whether the company had misclassified the drug and cost taxpayers millions of dollars. At the time, about 20 percent of EpiPen’s $1 billion in annual sales came from Medicaid, according to the SEC.
For the next year, Mylan argued that the government should drop its investigation. In response, the government sent more subpoenas, and had the company to sign an agreement extending the statute of limitations. In October 2015, however, Mylan began to share estimates of potential damages with the Justice Department, saying that in one quarter in 2015, calling EpiPen a generic had let the company avoid somewhere between $12 million and $42 million in rebates to Medicaid.
In 2014 and 2015, Mylan told investors in filings that it was discussing the matter with the Centers for Medicare and Medicaid Services, but the SEC said that the company misrepresented the government’s position, downplaying its risk.
Mylan said that it believes the SEC settlement is the right course of action. “The company continues to be committed to the highest levels of integrity with respect to all aspects of its business operations,“ it said in a statement.
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