EpiPen Price Scandal Overshadows Opioid Tax

By Pat Anson, Editor

The high cost of prescription drugs has been a hot topic this year for many Americans struggling to pay the soaring cost of healthcare. But a scandal over the price of a lifesaving medication provides a lesson on how tangled money, family and politics can get -– and how low the price of opioid painkillers ranks on the totem pole of public outrage.

The scandal involves the CEO of Mylan Pharmaceuticals -- who happens to be the daughter of a U.S. senator – whose financial compensation has ballooned right alongside the inflated price of the EpiPen, a drug injector that reverses allergic reactions to things like peanuts and bee stings.

According to NBC News, Mylan CEO Heather Bresch took home nearly $19 million in salary, stock and other compensation last year, amounting to almost a 700% raise over eight years.

During the same time period, Mylan jacked up the price of the EpiPen by over 400%. The pocket sized injector that sold for $56 in 2007 now costs $317 wholesale.

sen. joe manchin

sen. joe manchin

Bresch is the daughter of West Virginia Senator Joe Manchin (D), perhaps the biggest critic of opioid prescribing in Congress, who has alleged that pharmaceutical companies that make opioids have too cozy a relationship with the Food and Drug Administration.   

According to OpenSecrets.org, Manchin has accepted over $127,000 in campaign contributions from donors affiliated with Mylan, making the company the senator’s second largest corporate contributor. Mylan makes a wide variety of pharmaceutical products, including opioids.

There is no indication Manchin has ever acted on behalf of Mylan while in Congress, but his daughter’s involvement in the EpiPen scandal has created an embarrassing situation for the senator with many colleagues, including fellow Democrats.

"I demand that Mylan take immediate action to lower the price of EpiPen's for all Americans that rely on this product for their health and safety," Connecticut Sen. Richard Blumenthal (D) wrote this week in a letter to Bresch. “My office has been contacted by dozens of concerned Connecticut residents, families, school nurses, and first responders who urgently require your life-saving product but fear that its skyrocketing price has put it out of reach.”

“This outrageous increase in the price of EpiPens is occurring at the same time that Mylan Pharmaceutical is exploiting a monopoly market advantage that has fallen into its lap,” chimed in Sen. Amy Klobuchar (D), who called for a federal investigation of Mylan.

“Patients all over the U.S. rely on these products, including my own daughter. Not only should the Judiciary Committee hold a hearing, the Federal Trade Commission should investigate these price increases immediately,” Klobuchar said in a press release that claimed the Minnesota senator has “championed efforts to address the high cost of prescription drugs.”

Klobuchar’s concern about the cost of prescription drugs only goes so far. She is co-sponsoring legislation with Sen. Manchin that would establish a tax on all opioid pain medication.

If approved, it would be the first federal tax on a prescription drug levied directly on consumers.  Eight other senators are sponsoring the Budgeting for Opioid Addiction Treatment Act, also known as the LifeBoat Act, which would raise an estimated $2 billion annually to fund addiction treatment programs.

Democratic presidential nominee Hillary Clinton is another fan of Manchin’s opioid tax. In May, during a roundtable discussion about opioid overdoses in West Virginia, Clinton called the tax “a great idea” and said it was “one of the reasons why I am such an admirer of Sen. Manchin.”

Raising prices on opioids is one thing, but hiking the cost of EpiPens is apparently another. Today Clinton called the injector price hikes “outrageous” and “the latest troubling example of a company taking advantage of its consumers.”

Several weeks ago Pain News Network asked the Donald Trump campaign where the Republican nominee stood on the opioid tax. We have yet to get a response.

EpiPen Heather Bresch's "Baby"

Sen. Manchin has been in tangled situations before involving his daughter. In 2007, the Pittsburgh Post Gazette reported that West Virginia University bent the rules to give Heather Bresch a master’s degree in business administration – even though she had only completed about half the credits needed to earn it.

There is no indication that Manchin, who was then West Virginia’s governor, pulled any strings for his daughter, but the resulting scandal led to the resignation of several school officials and Bresch’s MBA degree was revoked.

That didn’t stop Mylan from promoting her to chief operating officer, then president, and now CEO.

Manchin was further embarrassed when Mylan took advantage of a tax loophole and moved much of the company's business to the Netherlands, where there are lower taxes and Dutch law made it easier to fend off a hostile takeover from a rival drug maker. Manchin told The National Journal that what his daughter did should be illegal.

Manchin has not commented publicly about the EpiPen pricing scandal, which Bresch played a major role in starting.  According to STAT, Bresch called the EpiPen her "baby" and spearheaded efforts to widen its use.

heather bresch

heather bresch

Mylan spent tens of millions of dollars in lobbying and advertising efforts that culminated in passage of a federal law that gives preferential treatment to schools that stockpile EpiPen injectors.  Sales of the EpiPen soared as a result and so did its price, even though the amount of epinephrine – the generic drug inside the injector – is only worth about $1 according to Bloomberg.

The EpiPen now generates $1.2 billion in sales for Mylan, which issued a long statement that vaguely blamed the injector’s soaring price on “changes in the healthcare insurance landscape.”

“This current and ongoing shift has presented new challenges for consumers, and now they are bearing more of the cost. This new change to the industry is not an easy challenge to address, but we recognize the need and are committed to working with customers and payors to find solutions to meet the needs of the patients and families we serve,” the company said.

The EpiPen scandal has enraged so many people that a MoveOn.org petition, called Stop Immoral Price Gouging for Life-Saving EpiPen, had garnered over 150,000 signatures.

Meanwhile, a petition drive aimed at scuttling the opioid tax has drawn a little over 1,600 signatures.