Mylan CEO defends EpiPen strategy, questions pricing model in the U.S.

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Mylan CEO Heather Bresch explains the product improvements the drugmaker made to the EpiPen after acquiring it in 2007 at the Forbes Healthcare Summit on Thursday in New York City. Photo credit: Forbes

Mylan CEO Heather Bresch defended the drugmaker over criticism of its Epipen price hikes by explaining the company's strategy to boost volume.

Mylan acquired the EpiPen in 2007 from Merck KGaA, then spent $1 billion on addressing access and making improvements to the product, Bresch said Thursday at the Forbes Healthcare Summit in New York City.

Those changes didn't come cheap, however. Mylan raised the price of the EpiPen twice a year for years, taking the list price of the drug from $164.98 in May 2011 to $608.61 in May 2016. Mylan's spending on branded ads for the EpiPen also rose significantly, from $9.4 million in 2011 to to $43 million in 2015.

“We got a lot right,” Bresch said, before noting, “We got some things wrong.”

See also: Mylan's branded ad spending on the EpiPen rose 357% — to $43 million in 2015 — over five years

Bresch's appearance at the summit proved controversial, coming as it did after she declined to attend a congressional hearing scheduled for the same day. That decision led Sen. Charles Grassley (R-IA) to say in a statement, “If CEOs can voluntarily appear at health summits, surely they should voluntarily appear before a Senate committee.”

Mylan, Turing Pharmaceuticals, and Valeant Pharmaceuticals International have become the go-to examples of companies egregiously hiking the prices of medicines already available on the market.That sentiment was addressed at the summit: One attendee commented that the EpiPen pricing controversy destroyed the goodwill associated with discounted antiretrovirals that the company provides to HIV/AIDS patients in Africa. .

Bresch responded by claiming that the EpiPen device has 15 critical, life-saving components. “I wouldn't undermine the importance of how this device works,” she noted.

See also: Drugmakers, facing pricing criticism, sell cures in new ads

When Mylan acquired the EpiPen, there was an underserved patient population and a lack of awareness about severe allergic reactions, Bresch noted. Now, in part because of Mylan's influence, 48 states require schools to carry allergy autoinjectors. The company also worked to address a misconception among physicians that Benadryl should be the first-line response to a severe allergic reaction.

“It's a whole new way of thinking about the product,” Bresch said.

What Mylan didn't anticipate was the backlash against its EpiPen strategy. That backlash was fed by a combination of price hikes and the health system's move toward high-deductible health plans that require patients to assume more of the costs of their healthcare.

“The pharma pricing system was not built on the idea of consumer engagement,” she noted, later adding, “The pricing system hasn't changed much in 25 years.”

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