House Members Grill Mylan CEO on EpiPen Price Hikes

U.S. lawmakers on Wednesday blasted steep price increases for Mylan's EpiPen emergency allergy treatment as they grilled the company's Chief Executive Heather Bresch at a congressional hearing.

The House Committee on Oversight and Government Reform called Bresch to testify after the company raised the list price for a pair of EpiPens to $600 compared with $100 in 2007, when it acquired the product.

Congressman Elijah Cummings, ranking Democrat on the committee, said Mylan "jacked up" the price of the life-saving product "to get filthy rich at the expense of our constituents."

"After Mylan takes our punches they'll fly back to their mansions in their private jets and laugh all the way to the bank," Cummings said.

The EpiPen is an automatic injector designed to treat life-threatening allergic reactions to anything from nuts to bee stings, delivering a dose of epinephrine through a quick jab in the thigh.

The price increases ignited a national controversy in August, as a growing number of families protested and said they were unable to afford the device through their health insurance.

Committee Chairman Jason Chaffetz of Utah noted that Mylan said it would soon sell a generic version of EpiPen for about $300. "Suddenly feeling the heat Mylan has offered a generic version and cut the price in half, so that does beg the question what was happening with that other $300?"

Holding up an EpiPen, he said: "the actual juice that's in here that you need costs about a dollar."

The hearing comes after Democratic presidential candidate Hillary Clinton previously called Mylan's price increases outrageous, while both Democratic and Republican lawmakers have called on federal agencies to investigate Mylan's business practices. Several U.S. states are probing the impact of the price increases on government healthcare programs such as Medicaid.

Mylan has responded to the criticism by offering discounts more widely to families, and said it plans to launch a half-price version of EpiPen soon, a move Bresch said on Wednesday would cannibalize its brand-name product.

"Our concern was absolutely that anyone who needs an EpiPen has one," she said.

EpiPen has more than a 90 percent market share for emergency epinephrine auto-injectors. In 2015 it accounted for $1 billion of Mylan's overall sales of $9.45 billion. The device accounts for about 20 percent of company profits.

Critics say EpiPen would remain profitable at a lower price.

A recent analysis by the consumer watchdog Public Citizen found that an EpiPen two-pack costs $69 in the United Kingdom, $181.81 in Canada and $210.21 in Germany.

"The EpiPen clearly is profitable at prices far lower than Mylan's U.S. prices," Robert Weissman, president of Public Citizen, said in a statement. "Mylan has dramatically hiked the price simply because it could, not because it needed to recover any cost of making the product."

Bresch said during testimony that after rebates, fees and costs, the company makes about $100 per EpiPen pack.

Lawmakers are also trying to determine whether Mylan made more money on the EpiPen than warranted from state Medicaid programs by having it classified as a generic product rather than a branded drug, resulting in much smaller rebates to the government health plans.

The U.S. Food and Drug Administration classifies EpiPen as branded but the Centers for Medicare and Medicaid Services classifies it as a generic for the purposes of Medicaid's drug rebate program.

Every company that participates in the Medicaid rebate program pays 13 percent in rebates back to the states on generic drug prices. They pay back 23 percent on the price of a branded drug. Mylan has said it complied with all laws and regulations regarding rebates.

Senate Republicans have asked the U.S. Department of Health and Human Services Inspector General to investigate whether its agency CMS made sure states were getting the correct rebates on covering EpiPen prescriptions.

EpiPen has also increased the cost burden to the Medicare program for the elderly, according to an analysis from the Kaiser Family Foundation, a health policy research group. Before rebates, EpiPen costs for Medicare Part D increased more than 1,000 percent between 2007 and 2014, from $7 million to $87.9 million, the report said.