Didn't it seem strange that Mylan, the pharmaceutical company that makes the EpiPen, enjoyed a stock price rally when the news came out in October that it was going to have to give the US government $465 million for overcharging Medicare? Well, the Department of Health and Human Services' Office of Inspector General says that Mylan overcharged taxpayers by $1.27 billion, making the half-billion dollar payout a simple cost-of-doing business expense.
Mylan, the scummy firm that jacked up the price of a single EpiPen injector from $57 to $500, deliberately misclassified the EpiPen as a generic drug, which allowed them to charge more for the life-saving medication.
The late afternoon news dropped the stock price of Mylan by 1 percent and tomorrow’s trading will show just how big a deal for the company this problem will be in the short term. Shareholders are pissed and a group of four institional investors are calling for six directors of the company to be blocked from reelection. The investors say that the directors have caused Mylan “significant reputational and financial harm.”
Mylan didn't invent the EpiPen, it acquired it in 2007, getting a drug that had been approved since 1987 and had 90 percent market dominance. Nor does it manufacture the EpiPen itself. Mylan buys it from a wholly owned Pfizer subsidiary for $34.50 per pen.
Mylan Chairman Robert Coury made $160 million 2016.
CNBC’s Brian Sullivan interjected, asking her to explain how the price of the drug could go from $100 five years ago to $600 today.
“How does that happen?” he asked.
“First, I know this is a complicated conversation around healthcare and insurance, (but) the $600 is a list price — $608 is a list price,” Ms Bresch said.
“What Mylan takes from that — our net sales — is $274. Against that, there’s (the cost of) manufacturing the product, distributing the product, enhancing the product, and investing.”
Sullivan asked if she understood the outrage.
“Surely Heather, you must understand the outrage,” he said. “People are outraged because it seems outrageous. The American Medical Association says this is basically the same product it was in 2009 and the price has gone up 400-fold.”
Then Ms Bresch uttered the phrase that ended up in headlines around the world.
“No one’s more frustrated than me,” she said.
“But you’re the one raising the price? How can you be frustrated,” Williams asked.
“Everybody should be frustrated,” Ms Bresch said. “I am hoping that this in an inflection point for this country, our healthcare is in crisis, it’s no different than the mortgage or financial crisis back in 2007. This bubble is going to burst.”
Meme: Twitter/Nora Finnegan