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Democrat Senator’s daughter raised price of EpiPen, raked in millions from cronyism

August 31, 2016

8/31/2016

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EpiPen-Auto-InjectorsMylan chief executive Heather Bresch is facing a slew of criticism for raising the price of a life-saving medication known as the EpiPen, and information that is coming to light about her questionable background and excessive salary is only adding to the outrage. The medicine, which had an average wholesale price of around $55 in 2007, now costs a whopping $600 to $700 for a standard two-pack.

The EpiPen, which is only available by prescription, provides a quick-acting shot of epinephrine to help counteract severe allergic reactions. Millions of Americans rely on the medication to deal with allergy emergencies, with many parents keeping the pens on hand at home and in their cars, backpacks and purses. According to calculations by analysts, the dosage that one pen contains is worth around $1, so many people are asking how Bresch and her firm can justify this astronomical price tag.

Bresch no stranger to controversy

Bresch is the daughter of Sen. Joe Manchin III (D-W.Va.). She started out in quality control at Mylan, before working her way up through the ranks, largely by turning the EpiPen into a billion-dollar medication. Shortly after becoming the first female head of a Big Pharma company, she found herself at the center of controversy after it was discovered that she didn’t quite earn the master’s degree in business administration that she listed on her resume.

An investigation revealed that administrators at West Virginia University added some grades and courses to her transcript so it would appear that she had actually completed the necessary coursework. Her father was the governor of the state at the time, and the school’s president, Mike Garrison, was a former business associate and a longtime family friend. She managed to come out of the incident unscathed, while Garrison and other administrators resigned in the wake of the scandal.

Mylan uses tax inversions to avoid paying U.S. taxes

She courted controversy once again when she decided to merge Mylan with a Netherlands company in order to move its legal corporate headquarters overseas. This helps the firm avoid the 39 percent corporate taxes in the U.S. This tactic has been denounced by various members of congress – including Bresch’s own father – for hurting the American economy.

More than 650 percent pay raise

Of course, Bresch herself would have no trouble paying the new price for the EpiPen. Her total compensation jumped from $2.4 million in 2007, to $18.9 million in 2015, which is an increase of 671 percent. She wears designer high heels, and is one of the rare executives who is still allowed to use company aircraft for personal business. In fact, the Pittsburgh Post-Gazette reported earlier this year that her corporate jet use had already reached $310,312 for a mixture of business and personal trips.

Bresch was also behind the expansion of Mylan’s Washington, D.C., lobbying efforts, which has helped them gain legislation that favors their interests, including a 2010 FDA recommendation that EpiPens be packaged in pairs.

Outrage among consumers and lawmakers

Several of Manchin’s colleagues in the Senate have asked the firm to lower the cost of the medication or explain the price increase, with some calling on federal regulators to launch an investigation into why the price has gone up 450 percent since 2004. Sen. Charles E. Grassley (R-Iowa) said he was concerned that the price hike would limit access and even drive some people to make their own potentially dangerous kits using raw materials.

Many parents and celebrities have been expressing their dismay on social media, pointing out that a trip to the ER is now cheaper than the EpiPen in some cases. Unfortunately, time is of the essence when it comes to many allergic reactions, so a lot of people are finding themselves in a very difficult situation right now.

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