{"id":9028,"date":"2016-09-21T08:31:00","date_gmt":"2016-09-21T16:31:00","guid":{"rendered":"http:\/\/associatednews.info\/content\/mylan-ceo-claims-epipens-arent-as-profitable-as-everyone-thinks\/"},"modified":"2016-09-21T08:31:00","modified_gmt":"2016-09-21T16:31:00","slug":"mylan-ceo-claims-epipens-arent-as-profitable-as-everyone-thinks","status":"publish","type":"post","link":"https:\/\/associatednews.info\/content\/mylan-ceo-claims-epipens-arent-as-profitable-as-everyone-thinks\/","title":{"rendered":"Mylan CEO Claims EpiPens Aren&#039;t As Profitable As Everyone Thinks"},"content":{"rendered":"<p><span style=\"font-style:italic;font-size:16px\">By  <a target=\"_blank\" href=\"http:\/\/www.npr.org\/sections\/health-shots\/2016\/09\/21\/494879607\/mylan-ceo-claims-epipens-arent-as-profitable-as-everyone-thinks?utm_medium=RSS&amp;utm_campaign=healthcare\">Alison Kodjak<\/a><\/span>  <\/p>\n<div class=\"ftpimagefix\" style=\"float:left\"><a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.npr.org\/sections\/health-shots\/2016\/09\/21\/494879607\/mylan-ceo-claims-epipens-arent-as-profitable-as-everyone-thinks?utm_medium=RSS&amp;utm_campaign=healthcare\"><img decoding=\"async\" width=\"150\" src=\"https:\/\/media.npr.org\/assets\/img\/2016\/09\/21\/ap_16258563445254-4aef95e068ffe651c1aed6c755015afb8a3a4551-s1100-c15.jpg\" alt=\"\"><\/a><\/div>\n<div>\n<div><button>Enlarge this image<\/button><\/div>\n<div>\n<div>\n<p>Heather Bresch, CEO of Mylan Pharmacueticals, will face lawmakers&#8217; questions Wednesday about the company&#8217;s steep price hikes for the company&#8217;s life-saving EpiPen auto-injector. <strong>Dale Sparks\/AP<\/strong> <strong>hide caption<\/strong><\/p>\n<\/div>\n<p><strong>toggle caption<\/strong> <span>Dale Sparks\/AP<\/span><\/div>\n<\/div>\n<p>The drug company that makes the EpiPen says it isn&#8217;t nearly as profitable as many people assume it is.<\/p>\n<p>At least that&#8217;s the message Mylan NV CEO Heather Bresch will try to deliver to members of Congress today.<\/p>\n<p>Bresch, who is scheduled to testify before the <a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/oversight.house.gov\/hearing\/reviewing-rising-price-epipens-2\/\">House Oversight and Government Reform Committee<\/a>, is expected to tell lawmakers that the company earns $100 profit on each two-pack of EpiPen auto-injectors, even though they carry a $600 price tag.<\/p>\n<p>&#8220;The misconception about our profits is understandable, and at least partly due to the complex environment in which pharmaceutical prices are determined,&#8221; Bresch says in prepared testimony. &#8220;The pricing of a pharmaceutical product is opaque and frustrating, especially for patients.&#8221;<\/p>\n<p>Bresch says it costs the company about $69 to make two EpiPens, and after rebates and fees, Mylan receives $274 per EpiPen pack. She says other, unnamed costs absorb an additional $105, leaving $100 in profit for the company.<\/p>\n<p>While the company apparently is looking to use the analysis to downplay its profits, analysts say the margin is still quite high.<\/p>\n<p>Ronny Gal, a pharmaceutical industry analyst at the investment firm Sanford Bernstein, says Bresch&#8217;s numbers mean Mylan makes a 40 percent profit margin on the device.<\/p>\n<p>The <a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/www.epipen.com\/en\/hcp\/for-health-care-partners\/for-school-nurses\">EpiPen<\/a> is a long, plastic tube that automatically injects a dose of epinephrine \u2014 or adrenaline \u2014 into a person&#8217;s thigh to stop an allergic reaction. It&#8217;s easy to use and portable.<\/p>\n<p>Mylan bought rights to the EpiPen in 2008 and launched an aggressive marketing and awareness campaign. That effort has made the so-called auto-injector a must-have for anyone with a serious allergy \u2014 perhaps to bee stings or tree nuts \u2014 that may trigger anaphylaxis, a life-threatening reaction in which the airways swell and close.<\/p>\n<p>The company has come under fire in recent months, however, because it raised the price of the device, which has been available for decades, more than 500 percent.<\/p>\n<p>The wholesale price of a single pen was about $47 in 2007, and it rose to $284 this summer, according to <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.ssrllc.com\/about-us\/research-analyst-bios\/\">Richard Evans<\/a>, a health care analyst at SSR. But consumers can no longer buy a single pen, so the retail price to fill a prescription today at Walgreens is about $634, according to <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.goodrx.com\/?utm_source=gemini&amp;utm_medium=cpc&amp;utm_campaign=Brand&amp;utm_term=good+rx&amp;c=gemini\">GoodRX<\/a>.<\/p>\n<p>Mylan has tried to quell the criticism first by offering customers a <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.npr.org\/sections\/health-shots\/2016\/08\/24\/491232665\/latest-target-in-the-drug-price-wars-the-ubiquitous-epipen\">coupon<\/a> worth up to $300 to offset the price of the device, and then announcing it would bring a <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.npr.org\/sections\/health-shots\/2016\/08\/29\/491797051\/maker-of-epipen-to-sell-generic-version-for-half-the-price\">generic version<\/a> of the EpiPen to market for half the retail price.<\/p>\n<p>In addition to the investigation by the House Oversight committee, at least three senators have also called for investigations into Mylan&#8217;s pricing practices. Sens. <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.grassley.senate.gov\/\">Charles Grassley<\/a>, R-Iowa, and <a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/www.blumenthal.senate.gov\/\">Richard Blumenthal<\/a>, D-Conn., have <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.grassley.senate.gov\/sites\/default\/files\/constituents\/upload\/2016-08-22%20CEG%20to%20Mylan%20%28EpiPen%29.pdf\">sent letters to Mylan<\/a> demanding an explanation for the increase.<\/p>\n<p>Mylan responded with a <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.grassley.senate.gov\/sites\/default\/files\/constituents\/Mylan%20Response%20to%20Sen%20Grassley%209%208%2016%20%28002%29.pdf\">letter<\/a> that Grassley, in a press release, said was &#8220;incomplete.&#8221;<\/p>\n<p>Sen. <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.klobuchar.senate.gov\/public\/\">Amy Klobuchar<\/a>, D-Minn., has asked the Federal Trade Commission to investigate whether Mylan has violated antitrust laws in its marketing of the EpiPen.<\/p>\n<p>And the Senate Finance Committee is <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.finance.senate.gov\/imo\/media\/doc\/Finance%20Republicans%20Call%20for%20Review%20of%20Rebate%20Practices%20for%20Mylan%20EpiPen.pdf\">reviewing<\/a> the rebates that Mylan offered to the Center for Medicare and Medicaid Services.<\/p>\n<p>In her testimony, Bresch says the company did not intend for its price hikes to hurt patients.<\/p>\n<p>&#8220;Looking back, I wish we had better anticipated the magnitude and acceleration of the rising financial issues for a growing minority of patients who may have ended up paying the full [Wholesale Acquisition Cost] price or more,&#8221; she says. &#8220;We never intended this.&#8221;<\/p>\n<p><strong><a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/blockads.fivefilters.org\/\">Let&#8217;s block ads!<\/a><\/strong> <a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/github.com\/fivefilters\/block-ads\/wiki\/There-are-no-acceptable-ads\">(Why?)<\/a><\/p>\n<p>Source:: <a href=\"http:\/\/www.npr.org\/sections\/health-shots\/2016\/09\/21\/494879607\/mylan-ceo-claims-epipens-arent-as-profitable-as-everyone-thinks?utm_medium=RSS&amp;utm_campaign=healthcare\" target=\"_blank\" title=\"Mylan CEO Claims EpiPens Aren&#039;t As Profitable As Everyone Thinks\" rel=\"nofollow\">http:\/\/www.npr.org\/sections\/health-shots\/2016\/09\/21\/494879607\/mylan-ceo-claims-epipens-arent-as-profitable-as-everyone-thinks?utm_medium=RSS&amp;utm_campaign=healthcare<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"ftpimagefix\" style=\"float:left\"><a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.npr.org\/sections\/health-shots\/2016\/09\/21\/494879607\/mylan-ceo-claims-epipens-arent-as-profitable-as-everyone-thinks?utm_medium=RSS&amp;utm_campaign=healthcare\"><img decoding=\"async\" width=\"150\" src=\"https:\/\/media.npr.org\/assets\/img\/2016\/09\/21\/ap_16258563445254-4aef95e068ffe651c1aed6c755015afb8a3a4551-s1100-c15.jpg\" alt=\"\"><\/a><\/div>\n<div>\n<div><button>Enlarge this image<\/button><\/div>\n<div>\n<div>\n<p>Heather Bresch, CEO of Mylan Pharmacueticals, will face lawmakers&#8217; questions Wednesday about the company&#8217;s steep price hikes for the company&#8217;s life-saving EpiPen auto-injector. <strong>Dale Sparks\/AP<\/strong> <strong>hide caption<\/strong><\/p>\n<\/div>\n<p><strong>toggle caption<\/strong> <span>Dale Sparks\/AP<\/span><\/div>\n<\/div>\n<p>The drug company that makes the EpiPen says it isn&#8217;t nearly as profitable as many people assume it is.<\/p>\n<p>At least that&#8217;s the message Mylan NV CEO Heather Bresch will try to deliver to members of Congress today.<\/p>\n<p>Bresch, who is scheduled to testify before the <a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/oversight.house.gov\/hearing\/reviewing-rising-price-epipens-2\/\">House Oversight and Government Reform Committee<\/a>, is expected to tell lawmakers that the company earns $100 profit on each two-pack of EpiPen auto-injectors, even though they carry a $600 price tag.<\/p>\n<p>&#8220;The misconception about our profits is understandable, and at least partly due to the complex environment in which pharmaceutical prices are determined,&#8221; Bresch says in prepared testimony. &#8220;The pricing of a pharmaceutical product is opaque and frustrating, especially for patients.&#8221;<\/p>\n<p>Bresch says it costs the company about $69 to make two EpiPens, and after rebates and fees, Mylan receives $274 per EpiPen pack. She says other, unnamed costs absorb an additional $105, leaving $100 in profit for the company.<\/p>\n<p>While the company apparently is looking to use the analysis to downplay its profits, analysts say the margin is still quite high.<\/p>\n<p>Ronny Gal, a pharmaceutical industry analyst at the investment firm Sanford Bernstein, says Bresch&#8217;s numbers mean Mylan makes a 40 percent profit margin on the device.<\/p>\n<p>The <a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/www.epipen.com\/en\/hcp\/for-health-care-partners\/for-school-nurses\">EpiPen<\/a> is a long, plastic tube that automatically injects a dose of epinephrine \u2014 or adrenaline \u2014 into a person&#8217;s thigh to stop an allergic reaction. It&#8217;s easy to use and portable.<\/p>\n<p>Mylan bought rights to the EpiPen in 2008 and launched an aggressive marketing and awareness campaign. That effort has made the so-called auto-injector a must-have for anyone with a serious allergy \u2014 perhaps to bee stings or tree nuts \u2014 that may trigger anaphylaxis, a life-threatening reaction in which the airways swell and close.<\/p>\n<p>The company has come under fire in recent months, however, because it raised the price of the device, which has been available for decades, more than 500 percent.<\/p>\n<p>The wholesale price of a single pen was about $47 in 2007, and it rose to $284 this summer, according to <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.ssrllc.com\/about-us\/research-analyst-bios\/\">Richard Evans<\/a>, a health care analyst at SSR. But consumers can no longer buy a single pen, so the retail price to fill a prescription today at Walgreens is about $634, according to <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.goodrx.com\/?utm_source=gemini&amp;utm_medium=cpc&amp;utm_campaign=Brand&amp;utm_term=good+rx&amp;c=gemini\">GoodRX<\/a>.<\/p>\n<p>Mylan has tried to quell the criticism first by offering customers a <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.npr.org\/sections\/health-shots\/2016\/08\/24\/491232665\/latest-target-in-the-drug-price-wars-the-ubiquitous-epipen\">coupon<\/a> worth up to $300 to offset the price of the device, and then announcing it would bring a <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.npr.org\/sections\/health-shots\/2016\/08\/29\/491797051\/maker-of-epipen-to-sell-generic-version-for-half-the-price\">generic version<\/a> of the EpiPen to market for half the retail price.<\/p>\n<p>In addition to the investigation by the House Oversight committee, at least three senators have also called for investigations into Mylan&#8217;s pricing practices. Sens. <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.grassley.senate.gov\/\">Charles Grassley<\/a>, R-Iowa, and <a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/www.blumenthal.senate.gov\/\">Richard Blumenthal<\/a>, D-Conn., have <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.grassley.senate.gov\/sites\/default\/files\/constituents\/upload\/2016-08-22%20CEG%20to%20Mylan%20%28EpiPen%29.pdf\">sent letters to Mylan<\/a> demanding an explanation for the increase.<\/p>\n<p>Mylan responded with a <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.grassley.senate.gov\/sites\/default\/files\/constituents\/Mylan%20Response%20to%20Sen%20Grassley%209%208%2016%20%28002%29.pdf\">letter<\/a> that Grassley, in a press release, said was &#8220;incomplete.&#8221;<\/p>\n<p>Sen. <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.klobuchar.senate.gov\/public\/\">Amy Klobuchar<\/a>, D-Minn., has asked the Federal Trade Commission to investigate whether Mylan has violated antitrust laws in its marketing of the EpiPen.<\/p>\n<p>And the Senate Finance Committee is <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.finance.senate.gov\/imo\/media\/doc\/Finance%20Republicans%20Call%20for%20Review%20of%20Rebate%20Practices%20for%20Mylan%20EpiPen.pdf\">reviewing<\/a> the rebates that Mylan offered to the Center for Medicare and Medicaid Services.<\/p>\n<p>In her testimony, Bresch says the company did not intend for its price hikes to hurt patients.<\/p>\n<p>&#8220;Looking back, I wish we had better anticipated the magnitude and acceleration of the rising financial issues for a growing minority of patients who may have ended up paying the full [Wholesale Acquisition Cost] price or more,&#8221; she says. &#8220;We never intended this.&#8221;<\/p>\n<p><strong><a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/blockads.fivefilters.org\/\">Let&#8217;s block ads!<\/a><\/strong> <a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/github.com\/fivefilters\/block-ads\/wiki\/There-are-no-acceptable-ads\">(Why?)<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[],"class_list":["post-9028","post","type-post","status-publish","format-standard","hentry","category-health"],"_links":{"self":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/posts\/9028","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/comments?post=9028"}],"version-history":[{"count":0,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/posts\/9028\/revisions"}],"wp:attachment":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/media?parent=9028"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/categories?post=9028"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/tags?post=9028"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}