Generic drug manufacturer Mylan is struggling to explain why it felt justified in jacking up the price of its EpiPen auto-injector by over 461 percent over the last seven years. During an interview on CNBC’s “Squawk Box” last week, Mylan’s CEO Heather Bresch stumbled around, trying to persuade an angry country that Mylan’s EpiPen pricing plan was anything but the naked, exploitative move it actually is. Here are just some of the arguments that Bresch tried to hide behind.
Blame the health care industry — Bresch laments that “Our health care is in crisis” and “No one’s more frustrated than me” when asked why Mylan needed such a high price for EpiPens. Of course, Bresch offers no explanation as to why a $1 dose of generic epinephrine in a plastic case with a retractable needle justifies a wholesale price of nearly $300 and a retail price of $600. Instead, she wants us to believe that our impossibly complex and broken health care system somehow forced her to gouge consumers against her will. That’s like a serial burglar blaming his burglary spree on ineffective security systems.
Blame insurance companies — After accusing the health care system writ large for the EpiPen price increases, Bresch points her accusing, bejeweled finger at health insurance companies. Bresch bizarrely tries to place blame for skyrocketing drug prices on high deductible health plans because “the patient is paying twice. They’re paying full retail price at the counter, and they’re paying higher premiums on their insurance.” Of course, Bresch neglects to mention that high deductible plans are a byproduct — not the cause — of runaway health care costs. Bresch is upset with high deductible plans, not because they increase prices for consumers, but because high deductible plans draw unwanted attention to confiscatory drug pricing practices of companies like Mylan.
Call on Congress to fix the system — Channeling her inner lobbyist, Bresch lectures that “Congress and the leaders of this country need to stop putting their toe in [health care system reform] and fix the outdated inefficient system.” Of course, she does not mention that she oversees the immensely influential Generic Pharmaceutical Association and that she is the daughter of West Virginia Sen. Joe Manchin. If there is anyone in Washington, D.C., that could impact how generic drug manufacturers are regulated it is Heather Bresch. Forgive me if I am skeptical about Bresch’s sincerity. The “outdated inefficient system” she laments in the “Squawk Box” interview is the same system that has netted her well over $50 million in compensation over the last three years alone.
Pretend that Congress has expressly chosen to subsidize drug costs worldwide — When pressed on why Canadian consumers can purchase an EpiPen for $100, but U.S. consumers are charged $600, Bresch trots out the familiar refrain that the United States has made a conscious decision to subsidize drug costs for the rest of the world. Of all of Bresch’s dubious claims, this is the one that fires me up the most. Mylan executives — and Mylan executives alone — drove up the EpiPen prices in the U.S. without any input whatsoever from policymakers. There was no policy discussion in Congress about subsidizing the Canadian health system. Even if Mylan is losing money on the EpiPen in Canada (which I highly doubt given how cheap epinephrine, needles, and plastic tubes are to produce), nobody asked Mylan to raise EpiPen prices for Medicare and Medicaid by nearly 500 percent so that Mylan can give Canada an 80 percent discount.
Heather Bresch’s “Squawk Box” interview was a charade and nothing more. She has no intention whatsoever to reform the health care system or to curb skyrocketing generic drug prices.
Dan Liljenquist is a former Republican state senator from Utah and former U.S. Senate candidate. He is nationally recognized for work on entitlement reform.