CEO Heather Bresch of Mylan, the company that makes EpiPen’s, has raised the price of EpiPen’s 461 percent since acquiring the drug in 2007.
EpiPen, short for epinephrine injection, is a life-saving auto-injection device for those with serious allergies that cause anaphylactic shock. The user can self administer the drug if a serious allergic reaction occurs.
When Mylan acquired the device in 2007 the cost of the drug to consumers was just $56.64, according to CBS News. By 2015, Bresch had spiked the price to $317.82. The price of the epinephrine inside the EpiPen is just one dollar.
In the first two years (2008 and 2009), Bresch raised the price five percent a year. At the end of 2009, she hiked the price 19 percent. For the next three years, she raised the price at a steady rate of 10 percent a year, reports CBS News. EpiPen’s profit margins were 55 percent in 2014, up substantially from 9 percent in 2009, according to Bloomberg. EpiPen’s now account for around 40 percent of Mylan’s operating profit.
How the price and profit margins of EpiPens skyrocketed is an interesting story. Bresch started a giant marketing campaign to play off “concerned parents of children with allergies,” reports Bloomberg. She combined these marketing efforts with an awareness campaign of the potential fatal outcomes associated with moderate to severe allergies.
While many American families have expressed their financial and health concerns with the rising cost of the drug, one pharmaceutical CEO has ardently defended Bresch’s price raises.
Martin Shkreli, former hedge fund manager and Turing Pharmaceuticals CEO, told CBS Tuesday that “Mylan is the good guy,” and furthermore that the company “had one product where they finally started making a little bit of money and everyone is going crazy over it.” To defend his claim, Shkreli said that the drug only costs $300 and that his Iphone costs over $700, likening a life-saving drug to an unnecessary consumer good.
When told this fact, Shkreli said “that doesn’t matter…It’s $300 and 90 per cent of Americans are insured,” reports the Daily Mail.
Outrage in Congress has been felt across the aisle, with both Republican and Democratic Senators writing to Mylan their complaints and one Senator evening calling for a federal probe into the company.
Mylan’s stock price, following media coverage Tuesday, fell five percent and is still declining.
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