The CEO of Mylan was grilled by the House on Wednesday over the skyrocketing cost of the company’s EpiPen allergy treatment.
Heather Bresch tried to defend her company by saying Mylan didn’t profit much from sales of the device — it makes about $50 per pen after costs and fees are deducted.
But that explanation didn’t satisfy members of the House Oversight Committee, who shot back at Bresch’s numbers with their own: the hundreds of millions pocketed by Mylan’s top executives in recent years.
“Yet another drug company, Mylan, has jacked up the price of a lifesaving product for no discernible reason,” Elijah Cummings, a Democrat from Maryland, told Bresch as the hearing opened.
He said it was happening so the company could get “filthy rich at the expense of our constituents.”
The cost of an EpiPen two-pack has risen from $94 in 2007, when Mylan bought the product, to $609 today.
When lawmakers asked if Mylan would cut the cost of its best-selling product, Bresch pivoted instead to a planned generic version she said will be marketed at $300.
But that response raised eyebrows.
Jason Chaffetz, a Republican from Utah, suggested a generic version would actually make more for Mylan because the company could sell it directly to customers.
“This is why we don’t believe you,” Chaffetz said.
Bresch said Mylan will make “considerably less” on the generic version than it makes on its branded device.
She also noted that the company is offering $300 savings cards for patients who have to pay full price, adding that Mylan “listened and focused on this issue and came up with a sustainable solution.”
Committee members also seemed eager to hear more about any alternatives to the Epipen, which has a near-monopoly in its market.
But Douglas Throckmorton, the FDA’s deputy director for regulatory programs, said he couldn’t offer many specifics. Throckmorton also wouldn’t comment about pending applications the department is reviewing.
Bresch’s total compensation hit $18 million last year. Public filings show she made about $2.5 million as Mylan’s president in 2007.
But she insisted that Mylan’s gains haven’t been outrageous, and told the committee her payout was “in the middle” of what her industry peers make.
Bresch also blamed the misconception about big profits in part on “the complex environment in which pharmaceutical prices are determined.”
Mylan’s defense of modest profit gains has been questioned by others.
A review of Mylan profits by David Maris, a pharmaceutical analyst at Wells Fargo, shows that the unit that markets EpiPen increased its operating profit margin from 8.8% in 2008 to 60.3% in 2016.
The EpiPen’s price was hiked 17 times during that time.
The treatment is also at the center of several antitrust investigations related to Mylan’s school distribution program. And USA Today reported Tuesday that Bresch’s mother used her job at an education association to help generate sales for the EpiPen.
Bresch on Wednesday called the article “completely inaccurate,” saying “it was a very cheap shot to bring my mother into this.”