DOSSIERS: Big Pharma ripoffs make headlines, but EpiPen’s greed is normal, systemic, not an aberration.

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Painted as EpiPen Villain, Mylan’s Chief Says She’s No Such Thing 

Heather Bresch, chief of Mylan, which has a reputation for bare-knuckled tactics that have angered competitors and investors. Credit Andrew Hetherington/Redux

By KATIE THOMAS, The New York Times
AUG. 26, 2016

America has a new pharmaceutical villain. Her name is Heather Bresch.

As the chief executive of Mylan, the owner of the severe allergy treatment EpiPen, Ms. Bresch is at the center of the latest public outrage over high drug prices, excoriated for overseeing a fourfold price increase on EpiPen while taking a huge pay raise.

From talk shows to Twitter, her name is being mentioned alongside Martin Shkreli, the so-called Pharma Bro who ignited anger last fall over raising the price of the drug Daraprim, and J. Michael Pearson, the onetime McKinsey consultant who took over Valeant Pharmaceuticals International and sharply raised prices on lifesaving drugs.

But Mr. Shkreli and Mr. Pearson were outliers trying to upend the industry. At one point, the pharmaceutical industry’s main lobbying group disavowed them.

Not so with Ms. Bresch. In many ways, she is an ultimate insider. Her father is a United States senator. She runs one of the largest generic drug companies in the world. She also oversees the Generic Pharmaceutical Association — the generic industry’s lobbying group.

Now the question is whether her different position will give her a different result. Both Mr. Shkreli and Mr. Pearson were forced out of their companies.

Already, Ms. Bresch, 47, has moved more quickly than they did to quell public furor over prices. On Thursday, she announced that the company was increasing financial assistance to patients to reduce their out-of-pocket costs. But the company did not say it would lower the list price — which has risen to about $600 for a pack of two EpiPens, from about $100 when Mylan acquired the product in 2007.

In an interview, Ms. Bresch said the price increases on EpiPen weren’t even in the “same hemisphere” as what Mr. Shkreli did when he raised the price of Daraprim by 50 times overnight.

Over the years, her brash leadership style has bruised egos but also, some say, improved access to drugs and raised quality standards. Her company, Mylan, also has a reputation for bare-knuckled tactics that have angered competitors and investors alike.

“I think we mean what we say: You can do good and do well, and I think we strike that balance around the globe,” Ms. Bresch said. Still, she was unapologetic that Mylan’s actions were driven by profit. “I am running a business. I am a for-profit business. I am not hiding from that.”

How the company, and Ms. Bresch, strikes that balance seems to be quickly changing. Generic drug companies once dealt almost exclusively in making cheap copies of pills and railed passionately against the anticompetitive tactics of brand-name competitors. Now, through a series of acquisitions and mergers, the handful of large generic companies that are left are increasingly investing in expensive brand-name drugs and in doing so, are embracing many of the tactics they once scorned.

“It’s like talking out of both sides of your mouth,” said Dinesh Thakur, an advocate for generic drug quality. “To me, I think, it’s opportunistic.”

In the interview, Ms. Bresch said the company’s latest actions would do the most to help patients where it mattered, by reducing their out-of-pocket costs. And she said that the $600 list price was necessary for the company to recoup its investment in the EpiPen, which includes raising awareness for severe allergic reaction and making improvements to the way the product works.

But she also sought to shift blame away from Mylan, saying that patients are feeling the pain in part because insurers have increased the amount that customers must pay in recent years.

“What else do you shop for that when you walk up to the counter, you have no idea what it’s going to cost you?” she said. “Tell me where that happens anywhere else in the system. It’s unconscionable.”

To some, the company’s response seemed to ring hollow. “It’s a real challenge to understand how a management team sits around a board table and makes a decision to raise the price of a lifesaving medication over and over and over, and when the P.R. storm hits, decides to blame someone else for that price increase,” said David Maris, an analyst for Wells Fargo. He had warned investors in June that Mylan’s price increases on EpiPen and other drugs could soon draw unwanted media scrutiny.

The company is not a stranger to controversy. Robert J. Coury, Mylan’s chairman who served as chief executive until 2011, came under scrutiny in 2012 for using the company’s corporate jet to travel to his son’s music concerts. And last year, The Wall Street Journal reported that one of the board members had undisclosed ties to the land where the company built its new Pittsburgh offices.

Ms. Bresch has also weathered her share of controversy, like when it was discovered that West Virginia University awarded her a business degree 10 years after she had attended the school, even though she had completed only about half of the coursework. A report by the university later concluded that officials wrongly awarded her the degree because she was the daughter of the then-governor Joe Manchin, now a Democratic senator representing West Virginia. Mr. Manchin and Ms. Bresch have said they did nothing wrong.

The company also angered shareholders when it switched its headquarters to the Netherlands, and then used a little-known provision in Dutch law to block a takeover by the pharmaceutical giant Teva, which many investors had favored. The move to the Netherlands in 2014, called an inversion, also reduced the company’s tax rate. Mylan is one of a string of pharmaceutical companies that have done inversions in recent years, prompting outcry in Washington and calls to limit the practice.

Ms. Bresch’s rising salary has also fueled anger over the EpiPen price increase. Since 2007, when EpiPen was acquired and she was the company’s chief operating officer, she earned about $2.5 million in total compensation. In 2015, her compensation was nearly $19 million. Mylan’s board has said in company filings that it believes her pay is justified because she has contributed significantly to the company’s growth in recent years.

Ms. Bresch, who has worked at Mylan for 25 years, said her West Virginia upbringing had informed her approach to serving as chief executive. “There is a work ethic and grit about that that allows me to help make a difference,” she said.

Some of the chafing at her style, she said, is because people are resistant to change. Her top accomplishments, she said, include getting a federal law passed that required more inspections of overseas drug manufacturers, and improving access to AIDS drugs for patients overseas. “To make change happen, to make a difference, mediocrity doesn’t get you there.”

Even as they have ruffled feathers within the industry, Ms. Bresch and Mylan have earned measured praise from consumer advocates, who said she wielded her influence in ways that helped consumers.

James Love, director of the consumers group Knowledge Ecology International, said Ms. Bresch opened doors at the Office of the United States Trade Representative when his group and others were working to change provisions in the proposed Trans-Pacific Partnership that they said would have limited access to drugs by people overseas. Mylan, as a seller of generic drugs, shared their interest, he said.

“They came in with some very talented people in the negotiations, and they knew what was going on politically,” Mr. Love said.

Still, he said, he opposes their position on the EpiPen and said his group was composing a letter of complaint to the Federal Trade Commission.

“I’m appalled at the price increase,” he said. “I don’t want to sugarcoat that.”

SELECT COMMENTS

Ms. Bresch is a perfect example of how politicians and pharma have combined to prey unchecked on vulnerable Americans…

TEVA Pharmaceuticals has inflated the price of cheap, generic drugs and the US government allowed it to acquire various generic drugs…

Interesting story with no easy answer. I’m not going to address her income as that is nothing but a lightning rod. This story really has no…