Former US President Bill Clinton listens as Robert Coury (R), CEO of Mylan Labs
by | August 25, 2016
Mylan, the makers of the life-saving EpiPen, pushed for laws to make the device mandatory for public schools in at least 11 states through various school incentives. The drug manufacturer has since avoided paying any U.S. taxes on these new profits by moving overseas.
Congress was given $4 million by Mylan Pharmaceuticals to pass the 2013 School Access to Emergency Epinephrine Act, which incentivizes schools to keep Mylan’s products in stock in the case of an allergic reaction.
One of its other school incentive programs, “EpiPen4Schools,” shut out competitors by temporarily giving schools discounted EpiPens so long as administrators agreed to only purchase epinephrine products from Mylan Pharmaceuticals.
As Mylan reaps the profits from these programs, it continues to receive millions in American taxpayer money through various federal programs like Medicaid and the Children’s Health Insurance Program. While much of this money is intended to offset consumer costs, Mylan has still jacked up prices of the EpiPen from $104 in 2009 to its present price of $609.
This has resulted in Mylan CEO Heather Bresch giving herself a 671 percent raise, but less than zero corporate tax income for the U.S.
A year and a half after Mylan secured their Congress backing, the company executed a corporate inversion to move its legal residence to the Netherlands while its headquarters and the majority of its employees stayed in Pittsburgh. This freed up Mylan to slash its effective U.S. tax rate from 9.4 percent to -4.7 percent, meaning the Pharma giant actually got money back from the U.S. Treasury rather than paying taxes.
While the U.S. lost all tax revenue from Mylan, the company’s worldwide tax rate plummeted from 16.2 percent to 7.4 percent as its global profits rose by 22.5 percent in the two years following Congress’s passage of the 2013 School Access to Emergency Epinephrine Act.
Nathan Wellman is a Los Angeles-based journalist, author, and playwright. Follow him on Twitter: @LightningWOW
Elected officials — including Hillary Clinton and the US senator father of the company’s CEO, Heather Bresch — who are now screaming about the price hikes didn’t say a peep as the cost of the medication skyrocketed over the years.
The company, Mylan NV, even spent $4 million lobbying for the School Access to Emergency Epinephrine Act, which ensured schools across the country would be buying EpiPens in bulk.
President Obama signed the act into law in 2013.
Politicians apparently weren’t alarmed as Mylan repeatedly hiked the price of the device, which delivers an emergency antidote to counteract life-threatening allergic reactions.
When the EpiPen was acquired by Mylan in 2007, it was selling for less than $100 for a two-pack.
Two years later, Mylan was scoring political points by teaming up with the Clinton Foundation on an HIV project — whose aim, ironically, was to lower the prices of medications in developing countries with drug-resistant HIV.
The firm also contributed $250,000 to the foundation.
Six months ago, with the price of EpiPens soon to hit $600, Joel Johnson, a Mylan lobbyist, hosted a fund-raiser for Hillary Clinton in Washington that drew John Podesta, the campaign manager.
But after public uproar over the price hikes, Clinton finally denounced the company on Wednesday,
“It’s just the latest troubling example of a company taking advantage of consumers,” she said.
Even Bresch’s father, Sen. Joe Manchin (D-W. Va.), is suddenly expressing “concerns.”
“I am aware of the questions my colleagues and many parents are asking, and, frankly, I share their concerns about the skyrocketing prices of prescription drugs,” Manchin said in a statement released Thursday.
His comments came after hundreds of Facebook users skewered him online.
“You must be so proud to have raised a daughter that is putting millions of American lives at risk,” one wrote. “Good job, dad!”
Another Facebook user, Bem Au, suggested Manchin’s daughter could cost him re-election in 2018.
“Keep ignoring the epipen crisis and you will pay for it at the ballot box,” he wrote.
Battered by damaging publicity, Mylan announced Thursday that it would be providing “patients in health plans who face higher out-of-pocket costs” with up to $300 discounts on two-packs of EpiPens.
Both Republicans and Democrats called that inadequate.
“The price is what Medicare, Medicaid and insurance companies pay,” said Sen. Chuck Grassley (R-Iowa), the chairman of the Senate Judiciary Committee.
“It’s what patients who don’t get assistance cards pay. And when drug companies offer patient assistance cards, it’s usually not clear how many patients benefit.”
Sen. Elijah Cummings (D-Md.), chair of the Oversight and Government Reform Committee, said he planned to hold hearings on the price-gouging.
Bresch, the Mylan CEO, blamed Congress for not moving to fix an “outdated” health-care system.
“Congress and the leaders of this country need to quit putting their toe in this topic and really fix the system. We have an outdated system, inefficient system,” she told CNBC Thursday.
“There’s no question the system is broken.”
Hillary Clinton blasts ‘outrageous’ explosion in EpiPen pricing, and drugmakers’ stocks are feeling the heat