There have been a lot of headlines about the shocking 400% price increase for the vital EpiPen, which is essential for people with life-threatening allergies. An article by a doctor in the NY Times says:
EpiPens are a perfect example of a health care nightmare. They’re also just a typical example of the dysfunction of the American health care system.
With the increase, EpiPens now amount to as much as 40% of the company’s revenues.
It is also a case study in corporate governance dysfunction. There have also been a lot of headlines about the shocking compensation increase for the CEO of Mylan, the company that makes EpiPens. Forbes writes:
But that 400% increase in wholesale price for EpiPen looks meager compared to the whopping 671% salary increase company CEO Heather Bresch is reported to have enjoyed in that same time period.
For the record, Mylan’s compensation committee members:
Mark W. Parrish
And, it’s a study in US tax policy dysfunction and an example of the global “race to the bottom.” Mylan is also a corporate tax dodger, taking advantage of “inversion” so that it is a corporate “citizen” of The Netherlands, though its board is in the UK and its operations are in the US. In addition to escaping taxes, this means it also reduces its accountability through the US corporate governance system.
Bresch is the daughter of a United States Senator and former governor, Joe Manchin of West Virginia. Perhaps he and his colleagues could take a look at what happens when we allow American companies to cherry-pick their tax domiciles without any consequences for their ability to do business with the US government, including government-funded healthcare, and the cost of reduced oversight when “inverted” companies continue to sell stock on US exchanges
Mylan has been “actively lobbying” in favor of a bill in the Senate that would mandate that all airlines, domestic and foreign, carry at least two packs of epinephrine auto-injectors. EpiPens are, by a large degree, the most commonly used devices of that nature in the United States.
Mylan has spent a reported $875,000 on lobbying so far this year, after having spent $1.55 million in 2015, according to OpenSecrets.org,
On Tuesday, CNBC noted how Bresch’s company, in addition to hiking the price of EpiPen by double-digit percentage amounts ever since Mylan acquired the device in 2007, has also been sharply raising the prices of other products this year.