Big Pharma execs are the new robber barons

Mylan Pharmaceuticals has been price gouging its life-saving injectable epinephrine — EpiPen — by charging $300 for a product that costs less than $10 to make.

Heather Bresch, chief executive at Mylan, the pharmaceutical giant that has been vilified for price increases on its EpiPen allergy treatment, maintains that her company has attained a sort of capitalist nirvana — it does good for others while doing well for itself. As Bresch says, the EpiPen is her “baby.”

The lack of ethics from Mylan and its CEO is an oft-repeated scenario by Big Pharma. They created nothing but paid billions — that must be recovered through sales — for a company that made their targeted product. They then generated skyrocketing returns through escalating price gouging, and even avoided taxes through inversion.

But the argument that Mylan has achieved a balance benefiting all of its stakeholders simply doesn’t hold up when viewed through the prism of the company’s recent proxy filings. Those materials detail the company’s executive pay and show, for example, that Mylan’s top brass received a windfall when it incorporated overseas in 2014 to cut its tax bill sharply.

This is not the first time that Mylan has attempted to monopolize a drug so that they could raise prices on a relatively cheap product to produce profits. In 2000, Mylan entered into agreements with the providers of the active pharmaceutical ingredient for widely prescribed anti-anxiety drugs lorazepam and clorazepate.

The effect was to deny competitors access to ingredients necessary to produce these drugs generically. Having done so, Mylan inflated the drugs prices by 2,000 percent and 3,000 percent respectively. Mylan was dragged into court by 32 state attorneys general and the U.S. Federal Trade Commission. The settlement basically required Mylan to disgorge all of the ill-gained profits in what was then the largest settlement with a drug manufacturer, amounting to well over $100 million.

But Mylan is not the only offender. Far from it. Valeant Pharmaceuticals between 2015 and this year raised the prices of Isuprel and Nitropress by 528 percent and 212 percent respectively; from 2013 to this year Cuprimine by 5,787 percent and Benzaclin and Retina-A Micro by 1,800 percent each; and from 2011 to this year Carac and Targretin 1,700 percent each. The drug Syprine went up by 3,200 percent since 2011.

Just like large health insurance corporations, BigPharma has the inherent tendency to invent new needs, disregard all boundaries and turn everything into an object for sale and big profit. To fix this problem, we might nationalize the pharmaceutical industry and mandate that drug companies be converted to non-profit public service corporations that serve the public interest rather than being used by one percenters for unlimited profit.

Another option is to establish a single-payer system of health insurance that allows a single purchaser — the government — to directly haggle with drug manufacturers over drug prices. This would bring U.S. drug prices in line with those of other high-income countries, which pay substantially less than we do for medications.

Additionally, we need comprehensive reform in the way we produce new drugs — inclusive of a public path for drug development and clinical trials that would produce new medications that remain forever in the public domain. Drugs, that is to say, that would function as real social goods, not rent-producing commodities.

Nobel Prize recipient Dr. Bernard Lown of the Harvard School of Public Health sums it up nicely: “One may only hope that Winston Churchill’s quip will soon be realized: ‘You can always count on Americans to do the right thing, after they have tried everything else.’ The United States has tried any number of bad solutions for providing its people with health care. Long overdue is the recognition that health care is a necessary social service that should be accessible to all citizens.”

— F. Douglas Stephenson, LCSW, LMFT, BCD, is a retired psychotherapist/clinical social worker who practiced in Alachua and Citrus counties and was a faculty member in the University of Florida Department of Psychiatry. He lives in Gainesville.

Photo by _Matt_T_


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