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 The House Committee on Oversight and Government Reform called Bresch
to testify in the wake of public outrage over EpiPen, whose list
price has risen to $600 for a pair of the devices compared with $100
in 2007.
Lawmakers in turn described the actions as "sickening," "disgusting"
and showing "blatant disrespect" for American families who can no
longer afford the life-saving device for children susceptible to
severe allergic reactions.
At several points, they cut off Bresch's efforts to explain the
intricacies of U.S. pharmaceutical pricing, including how health
insurers and other payers take a percentage of treatment sales.
Several lawmakers noted EpiPen's growing profits over the same
period as well as Bresch's annual salary, which has increased from
around $2.5 million to more than $18 million. They also faulted the
U.S. Food and Drug Administration for moving too slowly to allow
competing products to reach the market.
U.S. Representative Elijah Cummings, ranking Democrat on the
committee, said Mylan "jacked up" the price of the product "to get
filthy rich at the expense of our constituents." He questioned
whether Mylan would change course in any way following the backlash
over its pricing.
"After Mylan takes our punches they'll fly back to their mansions in
their private jets and laugh all the way to the bank," Cummings
said.
Bresch defended the price hikes, saying that after rebates,
marketing costs and other expenses, Mylan earns about $100 for a
pair of EpiPens. She emphasized that the company plans a half-price
version of the device, that it provides them free to many schools
and said that Mylan's generic medications combined have saved the
U.S. healthcare system $180 billion in costs over a decade.
"Our concern was absolutely that anyone who needs an EpiPen has
one," Bresch told the hearing. Mylan will also soon seek approval
for a new formulation that extends the shelf life of EpiPen from 18
months to at least 24 months, cutting down replacement costs, Bresch
said.
GROWING SCRUTINY
The EpiPen is an automatic injector, delivering a dose of the
generic medicine epinephrine through a quick jab in the thigh. It
commands over 90 percent of the market, with no competition expected
until next year at the earliest.
"I am a very conservative, pro-business Republican, but I am really
sickened by what I ... heard here today," Representative John J.
Duncan Jr. of Tennessee said at Wednesday's hearing.
The EpiPen price increases ignited a national controversy in August
following complaints by families. Congressional lawmakers have
called on federal agencies to investigate Mylan’s business
practices.
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Several U.S. states are probing the impact of the price increases on
government healthcare programs such as Medicaid. The pricing furor
has hurt company shares, bringing them to a historically low
valuation. [nL2N1BW14K]
At the hearing, Committee Chairman Jason Chaffetz of Utah questioned
why Mylan could now afford to offer a generic version of EpiPen for
about $300.
"Suddenly, feeling the heat, Mylan has offered a generic version and
cut the price in half, so that does beg the question what was
happening with that other $300?"
Holding up an EpiPen, he said: "the actual juice that's in here that
you need costs about a dollar."
In 2015, EpiPen accounted for $1 billion of Mylan's overall sales of
$9.45 billion and about 20 percent of company profit. Critics say
EpiPen would remain profitable at a lower price.
A recent analysis by the consumer watchdog Public Citizen found that
an EpiPen two-pack costs $69 in the United Kingdom, $181.81 in
Canada and $210.21 in Germany.
Lawmakers are trying to determine whether Mylan made more money on
EpiPen than warranted from state Medicaid programs by having it
classified as a generic product, resulting in much smaller rebates
to the government health plans.
The FDA classifies EpiPen as branded but the Centers for Medicare
and Medicaid Services deems it a generic for the purposes of
Medicaid's drug rebate program. Participating companies pay 13
percent in rebates on generic drugs versus 23 percent on branded
products.
Mylan has said it complied with all laws and regulations regarding
rebates.
EpiPen has also increased the cost burden to the Medicare program
for the elderly, according to an analysis from the Kaiser Family
Foundation, a health policy research group. Before rebates, EpiPen
costs for Medicare Part D increased more than 1,000 percent between
2007 and 2014, from $7 million to $87.9 million, the report said.
(Additional reporting by Caroline Humer in New York)
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