WASHINGTON _ Mylan NV was criticized for the profits it makes and the high pay of its executives after the drugmaker repeatedly raised the price on its EpiPen allergy shot, during a U.S. House of Representatives hearing on the company's business practices.
House Committee on Oversight and Government Reform Chairman Jason Chaffetz, a Utah Republican, told a packed hearing room in Washington that he found Mylan's arguments that it makes only about $50 of profit on each pen "a little hard to believe."
In a heated back and forth with Mylan Chief Executive Officer Heather Bresch, Chaffetz accused Bresch and Mylan of lying about how much money it makes, downplaying its profits while paying its senior executives hundreds of millions of dollars.
"They're here to tell us they make about $50 profit," Chaffetz said in his opening remarks. "Telling us the middleman makes more than we do. Here's what doesn't add up for a lot of people _ believe me I'm a person who believes in profit, profit motivation _ you have five executives who over five years earned over $300 million in compensation."
Bresch appeared before the committee Wednesday in the latest congressional hearing focused on high U.S. drug prices. The company became a target for outraged lawmakers and consumers after it raised the price of EpiPen, a self-administered injection used to treat dangerous allergic reactions, by about sixfold since 2007. At the hearing, the panel's top Democrat demanded that Bresch apologize even as he predicted that nothing would change after the hearing, and called for legislation.
"Today, we will hold yet another hearing where the industry will take these punches, but then go right ahead and keep raising their prices," Rep. Elijah Cummings, D-Md., said in a prepared statement. "They will fly back to their mansions in their private jets and laugh all the way to the bank while our constituents suffer, file for bankruptcy, and watch their children get sicker, and in some cases die."
Mylan raised the prices on the drug "to get filthy rich at the expense of our constituents," Cummings said at the hearing. Their strategy was to "find an old cheap drug that has virtually no competition and raise the price over and over and over again as high as you can."
Bresch, who is the daughter of Democratic Sen. Joe Manchin of West Virginia, made her case to lawmakers that Congress should recognize that Mylan has increased access to the drug. She said in her prepared testimony that Mylan only takes home about $100 after rebates, fees and discounts for each two-pack of the shots.
Bresch said that Mylan wasn't getting every dollar of the price increases. "Recent Epipen price increases have not yielded the revenue to Mylan that many people assume," she told the committee.
"Looking back, I wish we had better anticipated the magnitude and acceleration of the rising financial issues for a growing minority of patients" who had to pay the full list price or more, she said. "We never intended this."
"You never anticipated this? You raised the price, what did you think was going to happen?" Chaffetz asked her at the hearing.
The company, which is run from Canonsburg, Pennsylvania, but is officially registered in the Netherlands after a so-called tax inversion, is facing a multiple inquiries from lawmakers and law enforcement. The probes include state attorneys general investigating possible Medicaid fraud as well as legislative committees demanding internal documents from the company about EpiPen's price.
The oversight panel held a similar hearing on drug price hikes in February with former pharmaceutical executive Martin Shkreli and a top official at Valeant Pharmaceuticals International Inc.
Cummings didn't offer specific legislative proposals in his statement, though Democratic presidential candidate Hillary Clinton has called for a group to review sudden, "unjustified" price increases, especially for older drugs.
Mylan bought the right to sell and market EpiPen in 2007, from Merck KGaA. Since then, it has raised the price of the product from about $50 to more than $600 for a two-pack. It has subsequently said it will introduce a lower-priced, "authorized generic" for $300 per two-pack.
Cumming said that wasn't good enough, and accused the company of using "the same PR playbook that other companies use" by adding patient assistance programs.
"That's what Martin Shkreli did, that is what Valeant did, and that is what Mylan is doing," he said at the hearing.
As Mylan raised the price of EpiPen, it also helped push policies to have schools stock the shot, which is now the dominant epinephrine auto-injector in the U.S. In addition, it has led campaigns to raise awareness of dangerous allergic reactions and to get parents and children to carry EpiPen for rapid use. Cummings said that documents Mylan handed over to the committee show the drugmaker spent $100 million on advertising and marketing last year.
The committee also heard from the U.S. Food and Drug Administration, which has yet to approve a generic version of EpiPen that can be automatically substituted by doctors and pharmacists across the nation.
Douglas Throckmorton, a deputy director at the FDA's Center for Drug Evaluation and Research, or CDER, said in prepared testimony that the agency is helping closely held drugmakers, including Kaleo Inc., to make available more EpiPen competitors.
In his prepared testimony, he didn't mention Teva Pharmaceutical Industries Ltd.'s generic EpiPen, which the FDA rejected. Teva said the FDA cited "major deficiencies" in its application and any generic would likely be delayed until 2017.
