The CEO of the company that makes the EpiPen autoinjector was grilled on Capital Hill a week ago. These epinephrine delivery devices are sold only in pairs to treat severe allergic reactions that could lead to anaphylactic shock.
Some people have life-threatening allergies to bee stings or peanuts. They need to have emergency treatment immediately available.
What She Told Congress:
Heather Bresch, the head of Mylan, justified the $600 price of a two-pack on the grounds that Mylan makes a small $100 profit because the majority goes to middle men like insurance companies, pharmacies and benefit managers. But on further investigation it would appear that the actual profit was 60% higher, or $166.
We watched Ms. Bresch testify to the House Committee on Oversight and Government Reform last week. The Representatives were not buying her argument that the price increase (from less than $100 in 2007 to over $600 today) was justified. She maintained that the complexity of the pharmaceutical marketplace was responsible for the rapid price escalation. Republican and Democratic members of Congress grilled her about Mylan’s profit margins for EpiPen. The question was asked repeatedly and lawmakers seemed frustrated with her answer:
“I think many people incorrectly assume we make $600 off each pen. This is simply not true.”
Heather Bresch went on to insist that the profit on a two-pack of EpiPen was only $100. Turns out that was incorrect. Because the committee insisted on getting more details about profitability, Mylan was forced to reveal details about its accounting. Apparently the company had created the impression its EpiPen profits were $100 by deducting a corporate tax rate in the United States of 37.5%. In reality, Mylan’s overall tax rate worldwide was 7.4%. Even more intriguing, Mylan reported a negative tax rate in the U.S. last year thanks to an accounting strategy involving deferred taxes. After revising its numbers, Mylan notified the Congressional Committee and the Securities and Exchange Commission that a more accurate assessment would be a profit of $166 on a two-pack of EpiPen.
A Congressman’s Reaction:
The ranking Democrat on the House Committee on Oversight and Government Reform was not pleased with the new data. He was quoted in the Wall Street Journal:
“We didn’t believe Mylan’s numbers last week during their CEO’s testimony, and we don’t believe them this week either.”
Republican members of the committee were equally confused and annoyed by the testimony of the Mylan CEO. The only pharmacist in Congress, Buddy Carter, a Republican from Georgia, referred to Mylan’s pricing of EpiPen as a “shell game.”
Readers Are Also Mad as Hell!
We have heard from a lot of people about the high cost of prescription drugs. Here are just a few:
Brooke in Houston, TX, expresses a concern that many others share:
“I was getting allergy shots, which Medicare covered. They always made me stay half an hour past my shot to be sure I had no bad reaction, even long after I had reached full dosage and never had a reaction.
“Then suddenly they announced that I had to have an unexpired EpiPen with me for each shot and STILL had to wait the half hour! Well, you cannot buy one EpiPen. You ALWAYS have to buy TWO EpiPens. And the expiration date was always less than a year.
“So I’d leave one at doctor’s for them to share with an uninsured patient. And I’d throw the other away when it expired. I finally gave up on allergy shots because of the cost of the EpiPens. Why are people not attacking Mylan for the rip-off of not being able to buy just ONE EpiPen?”
Marianne in California says:
“EpiPen is life saving for people in need. Because of this, I believe it should be made available in our country, the USA, at an affordable price and regulated in some sort of form. Just as we can get flu, pneumonia, measles, shingles, tetanus shots etc. at reasonable pricing, EpiPen should be put into that same category.”
Dion in New Zealand shares this perspective:
“As a user of Adrenalin (epinephrine) due to bee stings, which I often get as I love the outdoor life style here in New Zealand, I could not fathom how the cost for an EpiPen was so darned high. I carry 2 or 3 1cc syringes used for diabetes and a couple of ampules of Adrenalin whenever I go tramping/camping. 5 x 1cc ampules of Adrenalin cost me $5 and my pharmacist charges me $1 per syringe.
“1cc of Adrenalin is usually enough to counter the bee stings. I inject 1/2 cc into the area of the sting and the other 1/2 into my upper arm with no problems.
“I have also used my syringes and Adrenalin on other people who have been stung by bees or jellyfish when often these people had no idea that they were allergic to anything. This has usually saved them from getting an emergency helicopter to rescue them from anaphylactic shock.”
Tara in South Carolina offers a sentiment shared by others:
“Thank you for addressing this issue! The price increase of EpiPens in recent years is infuriating! When I started buying them in 2011 they were somewhere in the range of $200 per pack.
“I don’t know how those who have to pay retail for this medicine can do it, especially if they need multiple sets. Mylan should be ashamed of themselves for unnecessarily pricing people out of lifesaving medication.”
Share your own thoughts on pharmaceutical pricing below in the comment section.
