Epipen’s 471% Price Increase under scrutiny while Mylan’s CEO Unloads $5 Million in Shares

We Are Change

Approximately one of every 89 Americans are prescribed epipens due to severe allergies. About 1 out of every 251 children under 18 were admitted to hospitals last year due to food allergies alone. Allergy attacks can be resolved by an injection of epinephrine. This practice was first implemented in the mid 1970’s in a product designed to be used by soldiers exposed to nerve gas – called the Mark 1 NAAK Combo Pen, developed and produced by Survival Technology Inc., a company who had previously been contracted by the pentagon. It wasn’t until 1996 when the auto-injector pens were available for commercial use, after Survival Technology Merged with Brunswick biomedical and distributed their products through a subsidiary of Merck KGaA, a German pharmaceutical company. After being distributed for 11 years under Merck, the generic version of the combo-pen had cost only $7 at the time when, in 2007, Mylan pharmaceuticals purchased the generic drugs division of Germany’s Merck KGaA for $6.7 billion. After acquiring the rights to market the Epi-pen, Mylan sold the plastic auto-injector pen for around $57.

 

The markup in price after being purchased for 6 billion may be justified to an extent, but there is NO justification for the proceeding increases in prices. The proportions of allergy-inflicted citizens we already steadily on on the rise when Mylan purchased the Epi-pen.

The market potential was already increasing when the product was purchased, and the price had been increased in the triple digits, but that is no big ordeal in today’s world. However, when the price ends up rising to $600 dollars for an pack of 2, the market of this product needs to be seriously questioned. Snopes reported that Mylan has donated between $100,000 and $250,000 to the Clinton Foundation, a non-profit organization under investigation for fraudulent use of money as well as being used for illegal political bribes.  In 2012, after a 7 year old died from a peanut allergy, a bill was passed that pressured states to keep epi-pens stocked in their schools. According to Bloomberg, “47 states require or encourage schools to stock the devices”. Mylan spent 1 million in lobbying during 2012, resulting in a bill that practically gave them a monopoly. For the next 3 years, Mylan would go on to spend 6 million in lobbying.

What has all this money spent lobbying achieved? A blind-eye from the government to the fact that no competitor has been able to get an auto-injector epinephrine pen to pass through the FDA, despite quality products. That is the reason why they were able to raise the price over 1000% in a matter of 9 years without new competition underscoring the high prices and driving them back down. Under criticism and public scrutiny for this price increase, Mylan pharmaceuticals released a statement claiming the price “has changed over time to better reflect the value the product provides”. Not only has the apparent value of the product changed, but the Chief Operating Officer, Heather Bresch, has also experienced a change in value. Her salary started off at 2.5 million dollars in 2007, eventually reaching 18 million in compensation during the year of 2015.

When a company is allowed to monopolize an industry that saves lives, and then gouge consumers with abnormally high prices simply because they can without having to worry about competition, then we must question the integrity of not only the company, but the governmental body that is regulating the industry. Multiple patents have been filed for various companies, with not one obtaining approval from the FDA, despite no legitimate concern. Mylan has also sued about every company that attempted to release an product that rivaled theirs. Now, with corruption being exposed rampantly, from within one of the two major political parties, to the non-profit clinton foundation that Mylan donated money too, the media cannot turn an blind eye to this. When people are spending hundreds of dollars on an item that costs less than 7 dollars to make out of necessity, we are not free. For many of the allergy-inflicted constituents out there, the doubts the FDA had on every patent would probably not concern them more than the prospect of having to work more than 2, 40-hour work weeks on minimum wage just to pay for a 2-pack of Epi-pens. So now the question is, how will our representatives respond to this news? Will they do nothing and “let the market settle it out”, or will they put a limit on profit margins, or will they simply investigate the FDA? Well, it wont be swept under the rug, the CEO of Mylan, Ms. Bresch, had sold 5 million dollars worth of her company’s stock in the light of this scrutiny. The CEO of the company has already anticipated repercussions in regards to her stock’s price, so what will be the repercussions in regards to drug monopolies as a whole? It is your move Congress.

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from We Are Change http://wearechange.org/epipens-471-price-increase-scrutiny-mylans-ceo-unloads-5-million-shares/