The Mylan EpiPen debacle may have inadvertently weakened the grip Big Pharma on U.S. lawmakers. Last week, a bill proposed by Senator Bernie Sanders was narrowly rejected by a vote of 52-46. Unexpectedly, 12 Republicans and 1 Independent voted with Senator Sanders in favor of allowing pharmacists and distributors to import cheaper prescription drugs from Canada and other foreign countries (something typically favored by Democrats.) The winds of change are starting to blow in the bipartisan direction when it comes to the pharmaceutical industry.
U.S. Healthcare needs a revolution ; ‘the shot heard round the world’ often refers to the opening shots of the American Revolution in 1775. The Big Pharma lobby is holding the American people hostage with their exorbitant ransom demands. Last summer, Mylan Pharmaceuticals, led by CEO Heather Bresch, overplayed their hand. Mylan came under fire for a 400% price increase in the EpiPen two-pack. This device is considered life-saving for children and adults with anaphylactic reactions to various food, insect, or environmental insults. Ms. Bresch insisted the significant price increase ($600-$700 for a medication which costs pennies) was justified due to the more ergonomic appearance of the delivery device and improved safety profile. Her miscalculation seems to have indirectly incited the war on Big Pharma by angering the public, the media, and the government simultaneously.
Ms. Bresch landed herself in front of the House Oversight and Government Reform Committee on September 21st, in attempts to defend her bold decision, where she insisted the company only profited $100 on each two-pack. Somehow despite a paltry profit margin, her salary ballooned from 2.5 million to almost 19 million between 2007 and 2015. Later that same month, the Centers for Medicare and Medicaid Services (CMS) discovered the EpiPen had been misclassified as a generic drug, making it ineligible for the low rebates Mylan was paying back to Medicaid. Essentially, Mylan overbilled Medicaid for its life-saving drug resulting in being saddled with a large settlement.
Ironically, CEO Heather Bresch is the daughter of U.S. Senator Joe Manchin (D-W.V.). Bresch has had ethical difficulties throughout her illustrious career starting when her father was a governor. Every decision she makes seems to border on unscrupulous. Laws in at least 11 states require schools to stock epinephrine, and keeping a stockpile is incentivized by federal law. So Mylan started the EpiPen4Schools program, in 2012, which provided free EpiPen two-packs to more than 65,000 schools, in an effort to ‘help’ children access life-saving medication. The EpiPen4Schools discounted price was $112.10; however, in order to qualify for that price, schools had to agree they would not purchase products from any EpiPen competitors during the next twelve months. A Mylan spokesperson said this requirement is no longer part of its program as of July1, 2016.
In the first days of this new administration, I find myself reflecting on the positives and negatives of the most recent Presidential campaign; it appears one noble outcome may be the ushering in of true bipartisanship to Washington. Big Pharma has relied upon their strategic lobbying efforts and targeted donations to key political insiders to ensure someone in power was always looking after their interests. It appears the direct tactical approach by Trump could redefine those battle lines. His comments calling out the pharmaceutical industry on their predatory tactics, sent drug sector stocks into a tailspin.
The morning of the pharmaceutical bill vote, President-elect Donald Trump accused Big Pharma of “getting away with murder.” He pointed out “there’s very little bidding on drugs,” blaming the harmful influence of the pharmaceutical lobby. Currently, federal law prohibits our government from negotiating Medicare drug prices with the pharmaceutical companies. Trump has called for dissolving this policy in the past, another policy that tends to be favored by Democratic lawmakers. Federal laws regulate much of healthcare delivery; why not Big Pharma? The tide may be turning; four more votes are all that are needed next time. Rep. Peter Welch (D-Vt.) has introduced a bill that would allow Medicare negotiation on drug prices. Prohibiting Medicare from the first right of refusal in regard to price negotiation and medication formulary exclusion absolutely must end.
The Pharmaceutical Research and Manufacturers of America (PhRMA), oppose Medicare negotiation and importation of foreign medications because they “will not ensure prescription drugs entering the U.S. from abroad are safe and effective.” Who are they kidding? Have you purchased medications outside the country before? It is a veritable smorgasbord of brand name medications, all with labels printed in English. It’s almost as if the medications walked across the border on their own accord. Big Pharma keeps peddling fear and trepidation; however, the tight grip they have had over Washington is at last loosening.
Those who supported Senator Sanders’ bill should be commended for voting with their conscience instead of their pocketbooks. The 13 courageous GOP and Independent Senators who voted with Sen. Bernie Sanders are: John Boozman (AR), Susan Collins (ME), Ted Cruz (TX), Jeff Flake (AZ), Charles Grassley (IA), Dean Heller (NV), John Kennedy (LA), Curtis King (ME), Mike Lee (UT), John McCain (AZ), Lisa Murkowski (AK), Rand Paul (KY), and John Thune (SD.) It is worthwhile to note, 13 Democratic Senators voted against this bill, however many, including my own Senator from Washington State, Patty Murray, had ties to the pharmaceutical industry. She received 300K in funding from Big Pharma during her most recent re-election bid.
The overconfidence of Mylan Pharmaceuticals in support of government and the public for restricting access to life-saving medications for children was “the shot heard round the world.” In one sweeping move, their CEO violated the trust of the consumer, by bankrupting them, Wall Street, as evidenced by declining share price, the pharmaceutical industry, by exposing their profit-driven manifesto, and most importantly, the federal government and its lawmakers.
Recently, CVS announced it would begin stocking a competitor of EpiPen, Adrenaclick, for $110, a textbook example of free market forces at work. An epinephrine delivery device has become available for $10 to patients at the largest pharmacy retailer in the nation within 6 months of Mylans’ price misstep. Most individuals with private insurance now qualify for a manufacturer’s coupon knocking $100 off the price which will be applied right at the register. The public maelstrom started by the CEO of Mylan not only took a toll on their share price, which tumbled from $54 to $36, but lost the monopoly on schools, pharmacies, and patients at the same time.
When President Ronald Reagan gave his infamous speech “Tear down this wall”, he noticed words of wisdom spray painted upon its structure; ‘This wall will fall. For it cannot withstand faith; it cannot withstand truth. The wall cannot withstand freedom’. Walls of Big Pharma have begun to crumble and it is time to hold their feet to the fire. Four more votes stand between consumers and the freedom to purchase medications in foreign countries for pennies on the dollar. Mylan deserves credit for showing us the ‘true colors’ of the pharmaceutical industry and my sincere hope is they can no longer stand in the way of the acquisition of knowledge, truth, and freedom of individuals to manage health for themselves.
Niran al-Agba is a pediatrician in Washington State. She is THCB’s private practice editor.