t a four-hour congressional hearing about EpiPen prices on Wednesday representatives excoriated the CEO of Mylan, Heather Bresch, taking the opportunity to call her to task on questions the company has so far successfully dodged.
“This hearing is critical because yet another drug company, Mylan, has jacked up the price of a lifesaving product for no discernible reason — and I did read your testimony, Ms. Bresch, and I was not impressed,” Rep. Elijah Cummings said in his opening remarks. “The reason being, I believe, is to get filthy rich at the expense of our constituents.”
Bresch in her testimony focused on the efforts the company has made to increase availability of the devices, but did not give a reason for the increase in price.
The House Committee on Oversight and Government Reform convened the hearing to address the “justified outrage from families and schools across the country struggling to afford the high cost of EpiPens,” according to a joint statement by the committee’s chairman Jason Chaffetz (R-Utah) and ranking member Cummings (D-Md.).
The outrage is driven by the increasing price of EpiPens, and the growing perception that Mylan has been using its monopoly position to drive up prices and drive out competition. A two-pack currently lists for about $608, which is over 450 percent higher than the price was in 2004. There are no generics currently available, and EpiPens made up 89 percent of the epinephrine auto-injector market last year, according to data from IMS Health.
Cummings said he is concerned that the hearing won’t lead to any real change, and that Mylan would just roll with the punches and go back to business as usual.
“After Mylan takes our punches, they’ll fly back to their mansion in their private jets and laugh all the way to the bank while our constituents suffer, file for bankruptcy, and watch their children get sicker or die,” Cummings said.
Some members of Congress didn’t even take the time to ask questions, opting instead to fill up their five minute allotments with a public shaming of the company.
Others pushed Bresch on the numbers she provided. Buddy Carter (R-Ga.) wanted to know exactly where the money flows in the supply chain, like how much money Mylan pays to the pharmacy benefit managers. Bresch said she didn’t have that information with her and said she would provide it within 10 days.
At the hearing, Bresch presented a table to show that Mylan makes a profit of $50 per EpiPen, with costs like “Cost of Goods Sold” and “Direct EpiPen Auto-Injector Costs.” Bresch said at the hearing that the direct costs included costs related to sales, marketing, disease awareness programs, and programs to provide access to EpiPens, but not research and development — a Mylan spokesperson later clarified that it did include R&D directly related to EpiPens.
“We would expect a very professional presentation on your [profit and loss statement], and these dumbed-down versions do not make sense without the definitions in here,” Chaffetz said, waving around a piece of paper with the table printed on it. “It just feels like you are not being candid and honest with Congress.”
Chaffetz called for more competition in the market, saying that this would help drive down the price. However, the availability of alternatives may not be enough — the introduction of Auvi-Q in 2013 did not lead to lower prices.
Hauling pharmaceutical executives before congressional committees to testify about increasing prices has become somewhat of a ritual.
Cummings reprimanded Martin Shkreli before the very same committee in February — but Shkreli said little, pleading the Fifth Amendment. The CEO of Valeant Pharmaceuticals admitted it was a mistake to so aggressively raise prices to the Senate Special Committee on Aging in April.
After Mylan acquired the rights to market the EpiPen in the United States, the company led a legislative campaign to get laws passed all over the country that enabled or required schools to keep epinephrine auto-injectors in stock. During some of that time, Bresch’s mother, Gayle Manchin, was president of the National Association of State Boards of Education, and she used that position to further Mylan’s legislative agenda, a USA Today investigation found.
At the hearing, Bresch said the USA Today article “is completely inaccurate.”
Mylan provided hundreds of thousands of EpiPens to schools for free, and also offered them at a discounted cost. The forms that some schools signed to order these discounted EpiPens included the provision that the schools would not buy competitive products. The New York attorney general is investigating Mylan for antitrust violations. Mylan has said that this exclusivity agreement is no longer part of their program.
Rising deductibles have made the price increases even more painful for individuals, who end up paying more out-of-pocket before their insurance kicks in. In light of media attention, congressional scrutiny, and investigations by attorneys general, Mylan has taken some steps to quell public anger, by making EpiPens available for free for families of four making under $98,000 and increasing the amount of a coupon that lowers costs for individuals with certain types of insurance plans.