Drugmaker raises the price of its product by hundreds of percentage points.
Public cries foul via social media.
Company CEO is pilloried.
Congress opens investigation.
Sound familiar? Because it’s happened before and, yes, it’s happening again.
After a tough week of widespread criticism and accusations of price gouging, quite reminiscent of last year’s Turing Pharmaceutical/Martin Shkreli controversy, pharmaceutical manufacturer Mylan announced today that it would launch a generic version of its own steeply priced allergy autoinjector EpiPen. The generic version, which will be identical to the branded one and is expected to hit the market in “several weeks,” will cost half the price of the EpiPen, which sells for around $630 per two-pack.
This is the second move Mylan has taken to combat the negative press surrounding the firm: Last Thursday, rather than caving to demands to lower the EpiPen’s price, which has risen about 500% in the last half-dozen or so years, the company instead said it would offer discounts of up to 50% off the product to help consumers cover its cost.
The company is working hard to differentiate itself from firms like Turing and Valeant, which has also come under scrutiny for price hikes such as the 800% increase of diabetes drug Glumetza. And CEO Heather Bresch has been making the rounds to bolster her own image, hoping to avoid being painted as the latest pharmaceutical villain. The optics aren’t necessarily in her favor as her salary rose more than 600% as EpiPen’s price grew and grew, and she has received likely unwelcome public support from the very unpopular “pharma bro” Shkreli.
It is unclear yet if or how much Mylan’s moves will help its public relations efforts. Robert Weissman, president of consumer rights advocacy group Public Citizen, wrote in The Huffington Post that Mylan’s excuses and discounts and now the promise of a generic aren’t enough to quell the public’s anger. (He also points out that the $300 price tag for the generic is still too high; Mylan profitably sells the EpiPen in Canada for some $200.)
According to Weissman:
“The weirdness of a generic drug company offering a generic version of its own branded but off-patent product is a signal that something is wrong … In short, today’s announcement is just one more convoluted mechanism to avoid plain talk, admit their price gouging and just cut the price of EpiPen.”
The uproar over the EpiPen price hikes was brought to light by a flurry of social media postings (even Senator Bernie Sanders got in on the action), which led to more than 121,000 letters being sent to Congress. As drug prices become increasingly politicized, and as social media works to bring issues to public awareness, I’d count on this trend continuing.
What company will be next? Which CEO is vulnerable to become the next Most Hated Person? And what moves will help appease the anger of the public and politicians? Industry leaders can always take a look at what Bresch and Shkreli have done — or not done — and learn from their mistakes.