How many EpiPens does it take to buy the CEO a corporate jet? At over $600 each per dose, you do the math.
That’s what Congress did when Mylan CEO Heather Bresch showed up in her corporate jet for hearings on the 600% increase in the cost of the life-saving drug over the last two years!
Photo Courtesy: Chicago Tribune
Taking a jet to a hearing in which she was cast as getting “filthy rich” at the expense of public health may not have been ideal, CNBC pondered after Rep. Bonnie Watson Coleman, D-N.J., said,
“It is a little stunning to see that so much money could be spent on whether you’re traveling around on a jet while we have this discussion here about whether Americans are being bilked for a lifesaving drug like EpiPen.”
And it appears to be a family affair. According to USA Today, Mylan’s EpiPen4Schools program requires that schools that entered the program had to sign a noncompete agreement. Those schools didn’t know that the president of the National Association of State Boards of Education who was lobbying them to join it was actually Ms. Bresch’s mother.
In her defense, Ms. Bresch retored:
“I certainly thought it was a cheap shot to bring my mother into this.”
And Ms. Bresch’s cheap shots didn’t begin with Mylan.
Fortune Magazine, in a tough profile, once described her career as being full of “ethically messy mishaps and public relations gaffes.” At least two involve her own father, Sen. Joe Manchin III, D-W.Va.
The most scandalous occurred in 2008 shortly after she was named the company’s chief executive and focused on the master’s degree in business administration from West Virginia University that was listed on her resume. It turns out she never got it. An investigation by the school, prompted by a newspaper report, found that some administrators had added courses and grades to her transcript to make it look as if she had completed the required coursework.
In 2015, Ms. Bresch caused another firestorm when she merged Mylan with a company in the Netherlands. The transaction is known as a “tax inversion” and involves joining with a foreign entity to move a legal corporate headquarters abroad. Doing so provides a major advantage: trading U.S. corporate taxes, which at 39 percent are among the highest in the world, for a tax bill from a different country that is presumably less. Such moves are so unpopular with the American public that only a handful of U.S. companies have attempted them. Members of Congress — including her father — denounced such tactics as undermining the U.S. economy.
According to CBS Chicago, the EpiPen is now so expensive that many families are struggling to cover the cost of the potentially lifesaving medicine. A standard 2-pack now costs between $600 to $700 and it expires every year. The price has prompted outrage among many consumers who have taken to social media to complain that they can no longer afford the potentially lifesaving medicine.
How Mylan pulled this off is a textbook case in savvy branding, combined with a massive public awareness campaign on the dangers of child allergies. Parents are encouraged or frightened into believing that the life-saving medicine is needed everywhere … in the car, in the kitchen, at grandmas, at school, on the playing fields! Along the way, EpiPen’s wholesale price rose a sickening 400 percent from about $57 each when Mylan acquired the product. In a live interview on CNBC, Ms. Bresch admitted that “we do subsidize the rest of the world, which is why the prices for EpiPens are much lower in Germany and Canada.”
Then there’s the matter of Ms. Bresch’s salary and other perks, which are unusually high, even in this era of crazy compensation for company executives. According to Securities and Exchange Commission filings, while Ms. Bresch’s reported compensation fell to $18.9 million last year from $25.8 million in 2014, her total compensation went from $2,453,456 to $18,931,068 from 2007 to 2015. That’s a striking 671 percent increase. That period coincides with the time when Mylan acquired the rights to EpiPens and steadily hiked the average wholesale price from about $55 to $320.
Similar recent unexplained price hikes by Valeant and Turing Pharmaceuticals have pretty much ruined the companies and forced their CEO’s to resign.
Private jets not withstanding, we wish these executives a healthy retirement!