Mylan CEO defends profit-driven company
America has a new pharmaceutical villain. Her name is Heather Bresch.
As the CEO of Mylan, the owner of severe allergy treatment EpiPen, Bresch is at the center of the latest public outrage over high drug prices, excoriated for overseeing a fourfold price increase on EpiPen while taking a huge pay raise.
From talk shows to Twitter, her name is being mentioned alongside Pharma Bro Martin Shkreli, who ignited anger last fall over raising the price of Daraprim, and J. Michael Pearson, the onetime McKinsey consultant who took over Valeant Pharmaceuticals and sharply raised prices on lifesaving drugs.
But Shkreli and Pearson were outliers trying to upend the business.
But Bresch, in many ways, is an ultimate insider. Her father is a U.S. senator. She runs one of the largest generic drug companies in the world and oversees the generic industry’s lobbying group.
Now the question is whether that will give her a different result — both Shkreli and Pearson were forced out of their companies.
Bresch, 47, has moved to quell the furor. Last week, she announced that the company is increasing financial assistance to patients, but did not say it would lower the list price — which has risen to about $600 for a pack of two EpiPens, from about $100 when Mylan acquired the product in 2007.
In an interview, Bresch said the price increases on EpiPen weren’t even in the “same hemisphere” as what Shkreli did when he raised the price of Daraprim by 50 times overnight.
“I think we mean what we say: You can do good and do well, and I think we strike that balance around the globe,” Bresch said. She is unapologetic that Mylan’s actions are driven by profit. “I am running a business. I am a for-profit business. I am not hiding from that.”
Generic drug companies once dealt almost exclusively in making cheap copies of pills and railed passionately against the anticompetitive tactics of brandname competitors. Now, through a series of acquisi-
tions and mergers, the handful of large generic companies that are left are investing in expensive brand-name drugs and in doing so, are embracing many of the tactics they once scorned.
Bresch said the company’s latest actions would do the most to help patients, by reducing their out-of-pocket costs. And she said that the $600 list price is necessary for the company to recoup its investment in EpiPen, which includes raising awareness of severe allergic reactions and improving the way the product works.
But she also sought to shift blame away from Mylan, saying that patients are feeling the pain in part because insurers have increased the amount that customers must pay.
“What else do you shop for that when you walk up to the counter, you have no idea what it’s going to cost you?” she said. “Tell me where that happens anywhere else in the system. It’s unconscionable.”
To some, the company’s response seemed to ring hollow. “It’s a real challenge to understand how a management team sits around a board table and makes a decision to raise the price of a lifesaving medication over and over and over, and when the PR storm hits, decides to blame someone else for that price increase,” said David Maris, an analyst for Wells Fargo.
Bresch has weathered her share of controversy, like when it was discovered that West Virginia University awarded her a business degree 10 years after she had attended the school, even though she had completed only about half of the coursework. The university concluded she got the degree because she was the daughter of the thengovernor, Joe Manchin, now a Democratic senator.
The company also angered shareholders when it switched its headquarters to the Netherlands, reducing its tax rate.
Bresch’s rising salary has also fueled anger. In 2007, when she was the company’s chief operating officer, she earned about $2.5 million. In 2015, her compensation was nearly $19 million. Mylan’s board has said her pay is justified because she has contributed significantly to the company’s growth.
Some of the chafing at her style, she said, is because people are resistant to change.
Even as they have ruffled feathers within the industry, Bresch and Mylan have earned measured praise from consumer advocates, who said she wielded her influence in ways that helped consumers.
James Love, director of the consumers group Knowledge Ecology International, said Bresch opened doors at the Office of the United States Trade Representative when his group and others were working to change provisions in the proposed Trans-Pacific Partnership that they said would have limited access to drugs by people overseas.
Still, he said, his group is composing a letter of complaint to the Federal Trade Commission about the EpiPen price.
“I’m appalled at the price increase,” he said. “I don’t want to sugarcoat that.”