Price gouging?

Heather Bresch decries comparisons to reviled CEO after EpiPen price hike

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Heather Bresch, chief executive of Mylan. (REUTERS/Alex Gallardo)

The chief executive of pharmaceutical company Mylan, Heather Bresch, has drawn condemnation, and comparisons to the universally reviled Martin Shkreli, after raising the price of the potentially life-saving drug EpiPen more than four-fold. Shkreli, who drew the public’s ire by raising the price of a life-saving drug Daraprim by more than 5,000 percent, expressed his support for Bresch via Twitter — even implying that he might be willing to testify on behalf of Mylan should the need arise. Shkreli is facing indictment by the federal government for securities fraud, but experts say that Bresch, the daughter of West Virginia Senator Joe Manchin III and overseer of the Generic Pharmaceutical Association, is unlikely to face the same fate.

The price of a pack of two EpiPens, each of which can save the life of someone undergoing anaphylactic shock, was $100 in 2007, when Mylan acquired the product. Today, the same pack costs about $600. Bresch, who has decried comparisons to Shkreli, announced on Thursday that the company would be increasing financial assistance to patients who needed it to reduce out-of-pocket costs. Brecht has said that the price increase was necessary for the company to recoup their investment in the drug, and that patients should be criticizing insurance companies, not Mylan, for not covering the full cost and passing the expense down to the consumer.

According to Wells Fargo analyst David Maris, however, to claim that the insurance company is to blame would be disingenuous. “It’s a real challenge to understand how a management team sits around a board table and makes a decision to raise the price of a lifesaving medication over and over and over, and when the P.R. storm hits, decides to blame someone else for that price increase,” he said.

Bresch is no stranger to controversy. Her business degree from West Virginia University was awarded 10 years after she had attended the school — despite the fact she completed only half of the coursework. A report issued by the school later said that officials wrongly awarded her the degree because of her status as the daughter of an influential politician — Manchin was the state’s governor at the time. Manchin and Bresch have both denied any wrongdoing in the matter.

Bresch also raised eyebrows, and upset shareholders, when she moved Mylan’s headquarters to the Netherlands and used an obscure provision in Dutch law to prevent a takeover by pharmaceutical giant Teva that many investors had favored. The move, also known as a corporate inversion, cut the company’s tax rate — a practice that has come under heavy criticism from federal lawmakers recently. Meanwhile, Bresch’s base salary has increased from about $2.5 million in total compensation in 2007, to nearly $19 million in 2015. The company’s board has defended the raise, saying it was justified by her contribution to the company’s growth in recent years.

Read the full story at The New York Times.

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