Mylan Pharmaceuticals CEO Heather Bresch defended her company's price hike of EpiPen, a life-saving allergy medication, and blamed the "system" during an interview with CNBC on August 25.
According to RawStory.com, the price of EpiPen has increased by 450 percent over the past 12 years, while Bresch's pay has gone up from $2.5 million in 2007 to $18.9 million in 2015.
Bresch told CNBC host Brian Sullivan that the new $608 price for a two-pack EpiPen is the list price, which means her company gets $274. She added, "We’re manufacturing the product, distributing the product, enhancing the product, investing. When we took over this product eight years ago, there was very, very little awareness. We have doubled the lives of patients who are carrying an EpiPen. We have passed legislation in 48 states to allow undesignated EpiPens to be in schools."
Not being a lawymaker, Mylan has never passed legislation, but as a corporation, it has lobbied lawmakers.
In response to Bresch's assertion that they are "enhancing the product," Sullivan noted that the American Medical Association (AMA) has said that today's EpiPens are basically the same as EpiPens in 2009, and yet the price has skyrocketed.
Bresch ignored the AMA's statement, and said: "No one is more frustrated than me."
Sullivan reminded Bresch that she is the one raising the price, and asked how she could be frustrated.
Bresch said that her frustration was from the list price (that she set) that she blamed on the "system" of product distribution, which almost every business in every industry has to deal with daily.
Bresch then moved the topic to the health care crisis in the U.S., which she then compared to the mortgage crisis in 2007. She blamed patient deductibles set by the health insurance industry, and said Congress needs to fix the "system."
Sullivan asked Bresch why she was now offering a triple rebate on EpiPen instead of just lowering the price.
Bresch said that if she lowered the list price then she couldn't ensure that everyone who needs an EpiPen would get one, so she "went around the system" with her rebates.
Nevertheless, patients still have to go through the "system" to get the rebate. Rebates are typically better for companies than lowering the price for all consumers, which means a straight drop in profits. Rebates, rather, affect companies only when some consumers follow all the paperwork to get them.
Sullivan asked Bresch again why she just can't roll back the price, but Bresch denied it was an issue about her company's pricing, but rather a "health care issue." Bresch blamed the broken "system" and the media's coverage of Mylan.
Sullivan asked Bresch about her $18 million annual salary, and Bresch said she wanted to "change this conversation":
Brian, look, I understand better than anyone that facts are inconvenient to headlines, and why I'm here today, and why I want to change this conversation, like I said, first of all, so everyone has access.
Let’s talk about over the last eight years what we’ve done, to your point, to make sure that people who need it have it.
When we passed legislation in 48 states to ensure that schools can have EpiPens. We have given out 700,000 free EpiPens. We stocked 65,000 public schools in this country with free EpiPens to ensure that they're there when needed.
Bresch's father, Democratic Sen. Joe Manchin of West Virginia, issued a statement on August 25, which made no mention of EpiPen or his relationship to Bresch:
I am aware of the questions my colleagues and many parents are asking and frankly I share their concerns about the skyrocketing prices of prescription drugs.
Today I heard Mylan’s initial response, and I am sure Mylan will have a more comprehensive and formal response to those questions. I look forward to reviewing their response in detail and working with my colleagues and all interested parties to lower the price of prescription drugs and to continue to improve our health care system.
In 2015, Fortune reported that when Bresch became the COO of Milan in October 2007, a company press release said that she had an MBA from West Virginia University, but the Pittsburgh Post-Gazette reported in December 2007 that the school had altered Bresch's grades and retroactively awarded her the MBA.
After being exposed by the newspaper, the school investigated itself, removed Bresch's MBA and said in a report that the grades were "pulled from thin air" by school administrators because of Bresch's "high profile."
"I certainly to this day believe I did everything I needed to do to get my degree," Bresch told Fortune.