Mylan Pharmaceuticals is launching a cheaper generic EpiPen alternative in response to the public backlash they have been facing. The company has lost more than $3 billion as investors react to the outcry over the pricing of the allergy drug. According to Raw Story, Mylan stocks went from $49.20 per share to $43.11.
— Aman Wraich (@awraich) August 29, 2016
Ars Technica reports that Mylan’s generic EpiPen is still three times the price that the life-saving device was in 2007, but the two pack will sell for $300 instead of the $608 brand name version. The news comes as the company is trying to stop the hits they have been taking since the story blew up. The controversy began when frustrated parents started a petition on Petition 2 Congress, called “Stop the EpiPen Price Gouging.” The petition called for an investigation into the fact that the price of the EpiPen had increased by more than 420 percent since 2004.
The petition states, “There is no discernible reason for the increase other than Mylan’s desire to use their monopoly to exploit the need for this life-saving medication for exorbitant profit.”
The EpiPen petition gathered more than 100,000 signatures in a short amount of time, and the story kept growing. The company lost two prominent spokeswomen in the furor of the last week. As the Inquisitr reported last week, Sex and the City‘s Sarah Jessica Parker announced she was ending her relationship with the company. That news was followed by Kelly Rudnicki, a Mylan spokeswoman for two years, also announcing that she was parting ways with the pharmaceutical company. Both women stated that they were terminating their relationship with the company as a direct result of the EpiPen fiasco.
Much of the anger with respect to the EpiPen price hike has been directed at Mylan Pharmaceuticals CEO Heather Bresch, the daughter of U.S. Senator Joe Manchin. According to the Chicago Tribune, Bresch’s salary has increased 617 percent, and in 2015 she earned approximately $19 million, in addition to her other perks. It doesn’t end there, however. The Guardian reports that Bresch dumped $5 million worth of Mylan stock the same day the company’s earnings report was released and right as the scandal was beginning to take hold.
Heather Bresch’s willingness to put profits before people is unforgivable and reckless: EpiPens save lives. https://t.co/elz8NYaNN8
— Bernie Sanders (@BernieSanders) August 28, 2016
The Guardian article states that Heather Bresch sold 100,200 shares in Mylan Pharmaceuticals on August 9. A Mylan spokesperson said that this was “part of a 10b5 plan.” The article states that 10b5 plans are essentially done to avoid any implication of insider trading because the written plan typically includes a waiting period.
However, Bresch was likely already aware that the company was headed for rocky times. In early June, Wells Fargo analyst David Maris prepared a report stating that Mylan had raised the prices of seven of its products by 100 percent or more and 24 products by 20 percent or more. Maris warned Mylan that they could face issues similar to that of Martin Shkreli, former chief executive of Turing Pharmaceuticals, who raised the price on an HIV medicine by more than 5000 percent. Shkreli was called before the United States Congress to testify about the outrageous price hike.
— Frank Thorp V (@frankthorp) August 25, 2016
Bresch’s father, Joe Manchin, the Democratic Senator from West Virginia, was forced to release a statement on the EpiPen controversy. He stated that he shared the concerns of parents everywhere about the rising cost of the life-saving drug and said that he is confident they will release a more comprehensive response that he looks forward to reviewing. With many of his colleagues in the Senate expressing their outrage at the price hikes, and Presidential nominee Hillary Clinton calling for the price to be lowered immediately, Manchin had to break his silence.
This is not the first time that Heather Bresch has faced controversy or the first time she has done something that affected her father. After starting at Mylan in an entry-level position in quality control, she shot through the ranks after turning the EpiPen into a billion dollar drug. In the Chicago Tribune article, they report that in 2008, it was discovered that Bresch had fudged her resume when she claimed that she had a Master’s Degree in Business Administration. After an investigation, it was revealed, “some administrators had added courses and grades to her transcript to make it look as if she had completed the required coursework.” The school’s president, Mike Garrison, was a family friend and close to her father, which brought them both under fire with her. Bresch weathered that storm and kept her position as CEO, but Garrison and other school administrators all lost their jobs.
— Leigh Durst (@livepath) August 29, 2016
In 2015, she was once again in the hot seat after merging Mylan with a company in the Netherlands, which helped them to avoid taxes. The move is known as “tax inversion” and basically means that the company has its head office in a foreign country, which allows them to avoid the high U.S. taxes. This avoidance of taxes is a big issue in the 2016 election with both Donald Trump and Hillary Clinton speaking out about it. Bresch’s father has denounced the practice as well, and once again, his daughter’s actions have pulled him into the debate.
During Bresch’s tenure with the company, the price of the EpiPen has gone from $55 to $320 for one pen. Meanwhile, Bresch’s salary has gone from $2,453,456 to almost $19 million in that same time period. With many people calling for Bresch to resign, and her defense of blaming it on everyone else, it remains to be seen whether she can withstand this firestorm that she ignited. The generic EpiPen will help calm the investors a little, but the public is still disgusted.
[Photo by Rich Pedroncelli/AP Images]