U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

24–914 PDF 2017

REVIEWING THE RISING PRICE OF EPIPENS 

HEARING 

BEFORE THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 21, 2016 

Serial No. 114–124 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 


KING-6430 with DISTILLER
(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

JASON CHAFFETZ, Utah, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

JIM JORDAN, Ohio 

TIM WALBERG, Michigan 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

CYNTHIA M. LUMMIS, Wyoming 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

RON DESANTIS, Florida 

MICK MULVANEY, South Carolina 

KEN BUCK, Colorado 

MARK WALKER, North Carolina 

ROD BLUM, Iowa 

JODY B. HICE, Georgia 

STEVE RUSSELL, Oklahoma 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

GLENN GROTHMAN, Wisconsin 

WILL HURD, Texas 

GARY J. PALMER, Alabama 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

TAMMY DUCKWORTH, Illinois 

ROBIN L. KELLY, Illinois 

BRENDA L. LAWRENCE, Michigan 

TED LIEU, California 

BONNIE WATSON COLEMAN, New Jersey 

STACEY E. PLASKETT, Virgin Islands 

MARK DESAULNIER, California 

BRENDAN F. BOYLE, Pennsylvania 

PETER WELCH, Vermont 

MICHELLE LUJAN GRISHAM, New Mexico 

JENNIFER HEMINGWAY, Staff Director 

DAVID RAPALLO, Minority Staff Director 

NATALIE TURNER, Counsel 

SARAH VANCE, Professional Staff Member 

WILLIE MARX, Clerk 


KING-6430 with DISTILLER
(III) 

C O N T E N T S 

Page 

Hearing held on September 21, 2016 ..................................................................... 1 

WITNESSES 

Dr. Doug Throckmorton, Deputy Director, Center for Drug Evaluation and 

Research, Food and Drug Administration 

Oral Statement ................................................................................................. 6 

Written Statement ............................................................................................ 8 

Ms. Heather Bresch, Chief Executive Officer, Mylan, Inc 

Oral Statement ................................................................................................. 17 

Written Statement ............................................................................................ 19 

APPENDIX 

Statement from Representative Gerald E. Connolly ............................................ 88 


KING-6430 with DISTILLER

KING-6430 with DISTILLER
(1) 

REVIEWING THE RISING PRICE OF EPIPENS 

Wednesday, September 21, 2016 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The committee met, pursuant to call, at 3:08 p.m., in Room 2154, 

Rayburn House Office Building, Hon. Jason Chaffetz [chairman of 

the committee] presiding. 

Present: Representatives Chaffetz, Mica, Duncan, Walberg, 

Amash, Gosar, DesJarlais, Gowdy, Farenthold, Massie, Meadows, 

DeSantis, Mulvaney, Buck, Walker, Blum, Hice, Carter, Grothman, 

Hurd, Palmer, Cummings, Maloney, Norton, Clay, Lynch, Cooper, 

Connolly, Duckworth, Kelly, Lawrence, Lieu, Plaskett, Boyle, 

Welch, and Lujan Grisham. 

Chairman CHAFFETZ. The Committee on Oversight and Government Reform will come to order. And, without objection, the chair 

is authorized to declare a recess at any time. 

We have an important hearing today, ‘‘Reviewing the Rising 

Price of EpiPens.’’ Anaphylactic shock will kill about 1,500 people 

a year. Roughly four people a day will die if they don’t get the 

proper dosage of epinephrine. It’s one of the ways that you can stop 

your child or your loved one from dying if they are going into this 

shock. 

This is a generic drug that’s been around for about 100 years, 

and it works, it’s a good product. People, parents, they need this. 

It’s not optional for somebody who has severe allergic reactions to 

a whole variety of things. 

But what we’re here to discuss today—and believe me, trying to 

drive into the depths of individual drug pricing was not something 

I set out to initially do—but it doesn’t take very long to talk to parents or talk to people who are afraid that if this EpiPen is not 

within arm’s reach when their young child suddenly needs it, you 

don’t have to talk to somebody very long to figure out that they 

have to have this. It’s not optional. 

And so here’s the concern. Here you’ve got a drug that’s been on 

the market for 100 years, costs roughly a dollar, the actual juice 

that’s in here that you need costs about a dollar. But the price of 

this has gone from, roughly, $99 for one to more than $600 for two 

in a very short amount of time. You literally see year over year 

where the price will jump $100 here and $100 there. It’s a product 

that is not available on insurance plans, a lot of insurance plans, 

it’s not mandated like some of the other things in ObamaCare are 

mandated. 


KING-6430 with DISTILLER
2 

And so suddenly you have people who can’t afford what is a 1- 

year dose, right? There’s an expiration date of a year. So you get 

two of them. Some families I’ve talked to have 10 of them, because 

they need them in the car, in the backpack, they have them all 

over. And now we’re talking about more than $600 to the consumer 

to have two of those. And so we’ve got a lot of questions. 

Now, Mylan, as best I can tell from afar looking at it, has done 

a lot of good in the world and they offer a lot of good products. But 

of the 635 products they offer, this generates about 10 percent, 

about 10 percent of their revenue is found in this one product. 

Now, they’re here to tell us that they make about $50 profit, 

which I find a little hard to believe, and that’s why I think it’s important that the CEO, and I appreciate her willingness to come in 

and talk to us, is telling us that, well, the middleman makes more 

than we do. We get less than half of that revenue actually goes to 

Mylan. 

But here’s what doesn’t add up for a lot of people, and believe 

me, I’m a person who believes in profit, in profit motivation: You 

have five executives in 5 years that earned nearly $300 million in 

compensation. And this is, by all accounts, as best I can tell, one 

of their biggest revenue drivers and one of the biggest revenue 

items. 

They used to have a competitor. That competitor dropped out of 

the market, I believe it was 2010. I could stand to be corrected, but 

I believe it was 2010. When that other product left the market, the 

product price zoomed. It just went up. 

So here’s yet but another example of a life-saving drug that you 

have to have, if you don’t have it you’re going to die, and there’s 

no competition. Which brings us to why we have Mr. Throckmorton 

here from the FDA. 

One of my concerns, based on the sole economics of it, right, 

basic economics, you have a generic product that’s been on the 

market for 100 years and suddenly you see this massive rise in the 

cost, the price to consumers. That would signal to entrepreneurs 

that there is an ability to make a profit. And when you understand 

that the cost of goods for the juice is only a dollar, the delivery vehicle, which is unique and it’s innovative, there’s a cost to that too, 

but when the juice is a dollar and they’re selling it for $600, there’s 

some room for some profit. 

But if new market entrants aren’t able to submit an application 

and get it through the FDA, then guess what? You have, in this 

case, Mylan, who is able to market a product, quickly raise the 

price, bring home an exorbitant amount of profit, with no competition. 

It was actually my brother who said, ‘‘Hey, why are you trying 

get in the business of some private entity and how they price?’’ I 

said because the market forces aren’t at work. Competition cannot 

be in there. Competition would be good. It would help drive down 

the price. So we want to hear about the FDA approvals. 

And the last thing I would also mention here along the way: Suddenly, feeling the heat, feeling the pressure, 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? I mean, driving 


KING-6430 with DISTILLER
3 

the price down is great, but Congress shouldn’t be micromanaging 

that. 

But I do think this is worth exploring because we, again, saw 

one, a different drug earlier this year that we did a hearing, and 

here we are again. And my guess is, if it’s happening in these two 

instances, it’s probably happening in others, maybe not as egregious, maybe not as big of a rapid rise. But I find this to be so extreme. 

And we’re talking about tens of millions of Americans who have 

to have it, there’s no competition, it’s extremely expensive, it’s not 

covered under insurance, there is not the competition, it is driving 

exorbitant profits, and that’s why I think myself and Mr. 

Cummings are very jointly united in trying to address this, understand it better. We may have different solutions to it. 

But let’s come back to my original premise: Parents don’t have 

a choice. If your child, your loved one has to have this, it better 

darn well be in that backpack. It better be there. It better be at 

school. And we want to try to offer some understanding and some 

relief to those parents and those people that go through that, because every day four people a day are going to die because they 

don’t have this product handy. 

I now recognize the gentleman from Maryland, the ranking member, Mr. Cummings. 

Mr. CUMMINGS. Mr. Chairman, I thank you for holding today’s 

hearing. And as you know, this issue of the skyrocketing prices of 

prescription drugs has been one of my top priorities for several 

years. 

This hearing is critical because yet another drug company, 

Mylan, has jacked up the price of a life-saving product for no discernible reason. 

And I did read your testimony, Ms. Bresch, and I was not impressed. 

And they raised the prices, the reason being, I believe, to get 

filthy rich at the expense of our constituents—at the expense of our 

constituents. 

May I hold your EpiPen? 

The EpiPen has been around for decades. It was introduced in 

1988. The active ingredient has been around even longer, and it 

costs just pennies to make, as the chairman said. 

So what changed? What changed? What changed is that Mylan 

acquired EpiPen in 2007. Then they used a simple but corrupt 

business model that other drug companies have repeatedly used. 

We’ve seen it over and over and over again. Find an old, cheap 

drug that has virtually no competition and raise the price over and 

over and over again as high as you can. That’s what Martin Shkreli 

did and that’s what Valeant’s CEO did. They sat at this very witness table earlier this year with absolutely no remorse. None. 

In Mylan’s case, they had a virtual monopoly over the market, 

and they decided to take advantage of it. As a result, today a product that used to cost about $100 for two EpiPens now costs more 

than $600. 

To understand why Mylan raised these prices so dramatically, 

we need to understand how much money they are making off of 

this drug. According to documents obtained by the committee, 


KING-6430 with DISTILLER
4 

EpiPen generated $184 million in net sales revenue in 2008—$184 

million. In 2016, listen to this, in 2016 Mylan expects this number 

to go up to more than 1.1 billion, as in ‘‘B.’’ That’s more than a fivefold increase over the 10 years. 

What else changed since 2007? The EpiPen became Mylan’s first billion-dollar drug. Mylan has received more than $4 billion in net 

sales revenue on this one drug over the last decade, and that’s 

after rebates and discounts. My, my, my. 

The company also engaged in a massive marketing campaign. 

According to information obtained by the committee, Mylan spent 

$100 million on advertising and marketing for EpiPens last year 

alone. 

Then came the price increases. When Mylan acquired EpiPen in 2007, the cost for two EpiPens was about $100. In 2012, they 

raised the price to about $218. Then they, in 2014, they raised it 

again. You see the pattern? They raised it again, to about $350. In 

2015, they were on a roll, they raised it again, to about $460. And 

now it’s $608. 

While the price of EpiPens shot up exponentially, so did Ms. 

Bresch’s paycheck and the lavish compensation of her fellow executives at Mylan. In 2007, Ms. Bresch received $2.45 million, according to financial reports. Not bad. By last year, her compensation 

had soared to more than $18 million, a 671 percent increase. 

Mylan’s chairman, Robert Coury, got even more. He made more 

than $22.5 million in 2014 alone. 

After the public backlash to Mylan’s most recent price increase, 

they announced they would expand their patient assistance program. We’ve heard that one before. This is the same PR playbook 

other companies use. When your price increases, finally spark public outrage, just say you’re expanding your patient assistance programs and make as much money as you can along the way. That’s 

what Martin Shkreli did, that’s what Valeant did, and that’s what 

Mylan is doing. 

Here’s the bottom line. I begged Martin Shkreli to use whatever 

influence he still had over his company to lower their prices. I 

pleaded with Valeant’s executives to lower their prices. I called on 

Mylan to reverse its drastic increases. But they all refused. 

They talk about discounts and coupons and rebates, but even 

with withering bipartisan criticism from Congress and desperate 

outcries from the American people—and, by the way, the American 

people that all of these folks up here represent, every single person 

up here has somebody that’s affected by this—they never, ever, 

never lowered the prices. 

I’m concerned that this is a rope-a-dope strategy. Today, we’ll 

hold yet another hearing where the industry will take their 

punches, but then they go right ahead and keep on raising their 

prices. I’m sure somebody said to them: You know, look, you just 

go in there, the Congress is going to be upset with you, but afterwards, you’re just going to come out of there, and we’ll just keep 

raising prices, we’ll keep doing it. 

After Mylan takes our punches, they’ll fly back to their mansions 

in their private jets and laugh all the way to the bank while constituents suffer, file for bankruptcy, and watch their children get 

sicker or die. That’s what we’re dealing with today. 


KING-6430 with DISTILLER
5 

Yesterday, someone asked me if I wanted the head of Mylan to 

apologize today. I had to think about that for a minute. I think it 

would be more appropriate, it would be nice if she did. But that 

will not cause Mylan to treat my constituents fairly and bring 

down the price to where it should be. 

We need solutions, I agree, Mr. Chairman, and I’m glad that this 

is a bipartisan effort. It’s time for Congress to act. We will hold today’s hearing just like we held our previous hearings. 

And to our witnesses, when we had Mr. Shkreli before us, he 

said something that was very interesting, and for some reason, Mr. 

Chairman, I think about it over and over and over again. As soon 

as he got out of the hearing, you know what he called us? Imbeciles. He said every Member of Congress is an imbecile. 

You know why he said that? Because he knew they would go 

back and do the same thing over and over again. So he took his 

punches. He rope-a-doped. As a matter of fact, he did worse than 

that, he took the Fifth. And the prices kept on going on up. 

And so I beg all of our colleagues to take just a moment. This 

is our moment. If there’s going to be something that we do in a bipartisan way, this is it, as the chairman said, and I watched the 

chairman in an interview yesterday. And I can tell that he and I 

were getting a little bit emotional. You know why? Because we 

were thinking about children. We were thinking about children 

who may have some kind of spell and need this just to breathe. 

So I hope, after the hearing is over, that you just don’t go back 

to the champagne, say: All right, we rope-a-doped it, and now we 

go on to life as it was. Because our constituents deserve better. 

And with that, Mr. Chairman, I yield back. 

Chairman CHAFFETZ. I thank the gentleman. 

We’ll hold the record open for 5 legislative days for any members 

who wish to submit a written statement. 

We’ll now recognize our panel of witnesses. We’re pleased to welcome Dr. Douglas Throckmorton, deputy director of the Center for 

Drug Evaluation and Research at the United States Food and Drug 

Administration, and Ms. Heather Bresch, chief executive officer of 

Mylan. 

We welcome you both, and thank you for being here. 

Pursuant to committee rules, all witnesses are to be sworn before 

they testify. If you will please rise and raise your right hand. 

Do you solemnly swear or affirm that the testimony you’re about 

to give will be the truth, the whole truth, and nothing but the 

truth? 

Thank you. You may be seated. 

And let the record reflect that both witnesses answered in the affirmative. 

We would now like to recognize you each for 5 minutes. We’ll be 

liberal in the time. If you want to go a bit longer than 5 minutes, 

that’s fine. But we want to make sure we maximize the time for 

members asking questions. Your entire written statement will be 

entered into the record. 

Dr. Throckmorton, you are now recognized for 5 minutes. 


KING-6430 with DISTILLER
6 

WITNESS STATEMENTS 

STATEMENT OF DOUG THROCKMORTON 

Dr. THROCKMORTON. Thank you, Chairman Chaffetz, Ranking 

Member Cummings. 

Chairman CHAFFETZ. Bring that microphone way up close. We’re 

going to ask you some questions. Bring it uncomfortably close. 

Dr. THROCKMORTON. All right. 

Chairman Chaffetz, Ranking Member Cummings, members of 

the committee, I am Dr. Douglas Throckmorton, deputy district for 

regulatory programs in the Center for Drug Evaluation and Research at the FDA. Thank you for this opportunity to appear before 

you today to discuss FDA’s role in ensuring the safety, efficacy, and 

availability of epinephrine auto-injectors. 

As Chairman Chaffetz said, epinephrine auto-injectors, with the 

most widely used and recognizable product being Mylan’s EpiPen, 

are critically important and potentially life-saving for patients who 

suffer from a severe allergic reaction called anaphylaxis. When a 

patient requires this medication, seconds count, and it must work 

every time. To ensure this, it is critical that both the medication 

and the device that delivers it perform as designed. 

At the FDA, we are aware of the recent spikes in the price of 

EpiPen. In fact, I am personally aware of it as my son carries an 

epinephrine auto-injector for his allergies. 

Although FDA does not have a regulatory role in the pricing of 

drug products, we do play a critical role in ensuring that patients 

have access to beneficial medicines. We also recognize that when 

more than one version of a drug, especially a generic version, is approved, it can improve marketplace competition and help to provide 

additional options for consumers. 

With this role in mind, FDA is working hard to support the timely, scientific, and efficient development of new epinephrine auto-injector products. 

I should first note that EpiPen is not the only product approved 

to treat anaphylaxis in an emergency. To date, FDA has approved 

four products to treat anaphylaxis, two of which are currently on 

the market. 

While doing what we can to support new epinephrine auto-injector product development, FDA cannot approve a product for which 

we haven’t received an application, which is why we’re doing all we 

can to support manufacturers as they work to develop innovative 

new products, including new epinephrine auto-injector products, 

and bring them to market faster. 

For example, in 2013, the agency provided technical information 

to industry to design and test auto-injectors. More recently, this 

year we released draft guidance on how to determine whether 

these devices can be used effectively by patients. 

These efforts can help development by providing a clear roadmap 

to reduce uncertainty that can slow development. 

We also recognize the importance of generic drugs in the United 

States and are working in this area to support their development. 

For example, as a part of our larger work to improve the review 

and development of generic drugs, FDA’s Office of Generic Drugs 

has a prioritization and expedited review policy that allows for cerVerDate Nov 24 2008 09:42 Apr 12, 2017 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 H:\24914.TXT APRIL

KING-6430 with DISTILLER
7 

tain products to get priority review, including products that are 

called, quote, ‘‘first generics.’’ 

To close, thank you for your interest in this important topic related to the safety, efficacy, and availability of epinephrine autoinjectors. FDA takes our role, our public health mission seriously, 

and is working hard to fulfill our role as it relates to this issue. 

One critical part of this mission is to assure that the medical 

products on market are safe and effective and that they can be 

used as needed. In addition, as a part of our mission, FDA is also 

playing an important role in advancing public health by helping to 

speed innovation that promotes the wider availability of these 

products. 

For complex medical products, such as epinephrine autoinjectors, this means providing a roadmap to developers seeking to 

market new products and working with them, whenever possible, 

in support of new product development. These efforts, coupled with 

the work of other groups with important roles to play, will help assure access to these important medicines for patients. 

I’m happy to answer any questions that I can. 

[Prepared statement of Dr. Throckmorton follows:] 


KING-6430 with DISTILLER
8 


KING-6430 with DISTILLERInsert offset folio 1 here 24914.001

Reviewing the Rising Price of EpiPens 

Statement of Douglas C. Throckmorton, M.D. 

Deputy Director for Regulatory Programs 

Center for Drug Evaluation and Research 

U.S. Food and Drug Administration 

U.S. Department of Health and Human Services 

Before the 

Committee on Oversight and Government Reform 

U .5. House of Representatives 

September22,2026 

www.fda.gov 

RELEASE ONLY UPON DELIVERY 
9 


KING-6430 with DISTILLERInsert offset folio 2 here 24914.002

U.S. Food and Drug Administration, COER 

Introduction 

Good morning Chairman Chaffetz, Ranking Member Cummings, and members of the 

Committee. I am Dr. Douglas Throckmorton, Deputy Director of the Center for Drug Evaluation 

and Research (CDER) at the Food and Drug Administration (FDA or the Agency). Thank you for 

the opportunity to appear today to discuss FDA's role in ensuring the safety, efficacy, and 

availability of pharmaceutical products, such as epinephrine auto-injectors and generic drugs. 

Although FDA does not have a regulatory role in the pricing of drug products, we do play a 

critical role in ensuring patients have access to beneficial medicines. We also recognize that 

when more than one version of a drug, especially a generic version, is approved, it can improve 

marketplace competition and help to provide additional options for consumers. With this role in 

mind, and as I discuss more fully below, FDA is working hard to support the timely, scientific, 

and efficient development of new epinephrine auto-injector products. 

Overview of the Epinephrine Auto-Injector Market 

Epinephrine auto-injectors are a critically important, and potentially life-saving, product for 

patients who suffer from a severe allergic reaction called anaphylaxis. The most widely used 

and recognizable product is Mylan's EpiPen. When a patient requires the medication, seconds 

count, and the epinephrine auto-injector must work every single time. To ensure this, it is critical 

that both the drug, and the device that delivers the drug, perform as designed. 

As a father, I am personally aware of these issues, as my son carries an epinephrine autoinjector for his allergies. 

FDA has approved four epinephrine auto-injector products to treat anaphylaxis; two of which are 

currently on the market. While there are currently no FDA-approved generic epinephrine autoinjectors, we stand ready to quickly review additional applications that come to us from both 

generic and innovator drug companies. Mylan's EpiPen is the market leader for epinephrine 

auto-injectors in the United States, and Mylan has recently publicly announced they also will 

September 21, 2016 1 
10 


KING-6430 with DISTILLERInsert offset folio 3 here 24914.003

U.S. Food and Drug Administration, COER 

offer an authorized generic version 1 to be available in the near future. Another firm, Amedra, 

holds an approval for Adrenaclick, which is also an epinephrine auto-injector. Currently, while 

the Adrenaclick brand name product is not being marketed, Amedra is marketing its own 

authorized generic version of the drug. Amedra also previously marketed Twinject under a 

different approval from FDA, but this product is currently discontinued. Finally, FDA also 

approved Auvi-Q as an epinephrine auto-injector, although this product was voluntarily recalled 

from the market in 2015 by Sanofi. We note that Auv1-Q was recently purchased by Kaleo, 

though this product has not yet returned to the market. In support of increasing the number of 

safe and effective epinephrine auto-injector products on the market, FDA is working with both 

Amedra a(ld Kaleo to facilitate the availability of their products. 

FDA Efforts In Support Of Epinephrine Auto-Injector Review and 

Development 

In addition to the work that FDA does with individual companies to support their development of 

specific products, FDA also works to create a publicly-available road map describing what 

companies need to do to bring various types of medical products to market. EpiPen and other 

epinephrine auto-injector products are considered combination products; that is, these products 

consist of a drug component and a device component. Because the drug has the primary role in 

treating the patient, CDER has the lead in regulating these products, with technical input on the 

device aspects provided by colleagues at the Center for Devices and Radiological Health 

(CDRH). 

FDA understands that development of combination products can be more challenging than for 

typical drug products, so we have taken a number of steps to help guide industry through the 

1. An 'authoriz~d generic' is made under the brand name's existing new drug application using the formulation, process, and 

manufacturing facilities approved for use by the brand name manufacturer. The labeling is changed to remove the brand name or 

other trade dress. An authorized generic is not synonymous with an FDA-approved generic, the latter of which requires a separate 

application and aPproval from that of the brand name product. 

September 21, 2016 2 
11 


KING-6430 with DISTILLERInsert offset folio 4 here 24914.004

U.S. Food and Drug Administration, COER 

process. First, FDA is continuing to develop, publish, and update guidance documents, which 

are a kind of road map for industry sponsors, explaining FDA's recommendations for the kind of 

information that should be included in a marketing application. 

For example, in February 2016, FDA issued a draft Guidance on Human Factors Studies and 

Related Clinical Study Considerations in Combination Product Design and Development, 2 

which describes the different kinds of human factors studies that may be appropriate for certain 

combination products, including drugs and biologics delivered by auto-injectors. Human factors 

studies are conducted to better understand how healthcare providers or patients interact with a 

product's technology and to understand how the user interface affects the quality, experience, 

and outcomes of that interaction. These kinds of studies, while not recommended for every 

product, can be important to FDA's evaluation of the device component of a·drug-device 

combination product by helping to determine whether these complex devices can be used by 

patients. In addition, in June 2013, the Agency finalized a Guidance that provides technical 

information to industry about designing and testing auto-injectors. 3 

Guidance documents can provide vital information to drug and device developers for a class of 

products. FDA recognizes that for more complex products such as epinephrine auto-injectors 

that contain a drug and a device component, in addition to guidance, one-on-one advice may be 

needed for sponsors seeking to develop complex products so FDA can address technical and 

regulatory questions about the pathway to market. Such meetings occur now for both new 

drugs and generic drugs under development. In addition, FDA regularly responds to specific 

product-development questions from industry in writing to help companies develop generic drug 

applications through the process known as Controlled Correspondence. We hope to expand our 

ability to engage with generic product sponsors through a reauthorization of the Generic Drug 

2. http:l/w'ww.fda.govldownloads!Regulatorylnformation!Guidances/UCM484345.pdf 

3. hffp:li\vww.fda.gov!downloads/Regulatorylnformation!Guidances/UCM147095.pdf 

September 21, 2016 3 
12 


KING-6430 with DISTILLERInsert offset folio 5 here 24914.005

U.S. Food and Drug Administration, COER 

User Fee Amendments (GDUFA II), where complex product meetings have been described as a 

key provision of the proposed program. 

Further, FDA prioritizes the resources we make available to focus on areas of high public health 

needs. For example, FDA's Office of Generic Drugs (OGD) has a prioritization and expedited 

review policy for certain generic drug applications. The policy is set forth in a publicly available 

document called a Manual of Policy and Procedures (MAPP), which can be found on the FDA 

website. Pursuant to OGD's prioritization policy, Abbreviated New Drug Applications (ANDAs) 

for drugs that have "first filer" status or that otherwise are eligible to be the first generic approved 

are prioritized and given expedited review. 

Each of these, and other efforts of FDA, help clarify our expectations and prioritizations 

concerning specific products so industry can develop and obtain approval of generic versions of 

branded drugs more quickly. 

While FDA is working to lay out a road map to support efficient development of complex products 

like drugs delivered using an auto-injector, consistent with FDA standards, we cannot and will 

not allow a substandard product, in this or any product area, to come onto the market. For these 

epinephrine auto-injector products, a patient suffering a life-or-death allergic reaction must be 

able to pick up and effectively use that device without a moment's hesitation. 

The remainder of my statement provides additional information about two factors that influence 

the development of drug products, including epinephrine auto-injectors, as well as a brief 

discussion of the limited FDA role in the intellectual property issues that can influence drug 

development. 

Abbreviated Pathways to Approval 

There are two abbreviated approval pathways established by the Hatch-Waxman Amendments 

to the Federal Food, Drug, and Cosmetic Act allowing for the approval of drug products. The 

first is the approval of ANDAs, and drug products approved under this pathway are commonly 

September 21, 2016 4 
13 


KING-6430 with DISTILLERInsert offset folio 6 here 24914.006

U.S. Food and Drug Administration, CDER 

referred to as generics. Unlike an innovator drug application, a generic drug application does 

not need to independently establish the safety or effectiveness of the drug. Instead, the generic 

drug has to show that it is the same as an innovator product in several fundamental ways, such 

as in active ingredient, dosage form, route of administration, strength, and labeling {except for 

certain permissible differences in labeling); that the generic drug is absorbed and available at 

the site where it will act in the body at the same rate and to the same extent as the innovator 

drug {which is known as bioequivalence); and that it meets the same high standards for drug 

quality and manufacturing as an innovator product. If the ANDA meets these requirements, the 

generic applicant can rely on FDA's previous finding of safety and effectiveness of the branded 

drug product, and need not conduct its own clinical investigations to establish safety or 

effectiveness. 

FDA approval of an ANDA indicates that FDA considers the generic product to be 

therapeutically equivalent to the branded drug product. This means that the Agency has 

concluded, among other things, that the generic and branded products can be substituted with 

the full expectation that the generic product will produce the same clinical effect and safety 

profile as the innovator product when administered under the conditions specified in the 

labeling. Therapeutic equivalence ratings are published by FDA in what is commonly known as 

the "Orange Book." Although FDA does not itself determine when a pharmacy would substitute 

a generic product in filling a prescription, state pharmacy laws and other regulations that 

determine substitutability often refer to these "Orange Book" ratings. 

The Hatch-Waxman Amendments also established a second abbreviated pathway for drug 

applications. This pathway, commonly referred to as the "{b){2) pathway," can be thought of as 

a hybrid between the pathway for an entirely innovative product and the ANDA pathway for a 

generic drug. In contrast to an ANDA, a {b){2) application is submitted in a new drug application 

and can be submitted for a proposed drug product that differs in certain ways from the 

previously approved branded drug product, differences that are generally outside those 

permitted for an ANDA product. For example, the drug product can share common attributes 

like active ingredient and dosage form with an innovator product, but be approved for a new use. 

This allows for a shorter approval pathway where applicants also have the flexibility to propose 

drug products that differ from the branded product in ways generally not permitted in the case of 

September 21, 2016 5 
14 


KING-6430 with DISTILLERInsert offset folio 7 here 24914.007

U.S. Food and Drug Administration, CDER 

an ANDA. Unlike generic drugs, products approved under the (b )(2) pathway on approval are 

not presumed to be therapeutically equivalent to the branded product and, if a (b)(2) applicant 

seeks a determination of therapeutic equivalence, it must demonstrate this separately. 

Drug products for which the sponsor has submitted all of the needed safety and effectiveness 

information, as well as those approved under the (b)(2) pathway, are approved as New Drug 

Applications (NDAs). None of the currently approved epinephrine auto-injector products have 

been approved as generic drugs under the ANDA pathway. We also note that none of the 

currently approved epinephrine auto-injectors have been rated as therapeutically equivalent to 

EpiPen. Nonetheless, while generic drug products approved under ANDAs may have a greater 

impact on competition in the marketplace than competing products approved under NDAs, 

similar products approved under NDAs can also increase competition in the marketplace. 

FDA's Role in the Intellectual Property landscape 

Although FDA can and does encourage generic drug development, and has and continues to 

streamline and improve its review and approval of generic drug applications, the decisions of 

whether to seek approval for a proposed generic drug and whether to market an approved 

generic drug are controlled by the generic drug industry. Further, the extent to which the 

approval or marketing of generic drugs is delayed because of intellectual property rights or 

marketing exclusivities is largely controlled by branded-drug manufacturers and others that hold 

those rights. 

With respect to patents, FDA has only a "ministerial" role. First, sponsors of innovator products 

must submit information regarding certain patents related to their products to FDA. FDA lists 

these patents, such as those for Mylan's EpiPen, in the "Orange Book." In any application that 

seeks to rely on a previously approved NDA, which includes (b)(2) applications and generic drug 

applications, the applicant must describe whether it intends to challenge those listed patents in 

court. 

September 21, 2016 6 
15 


KING-6430 with DISTILLERInsert offset folio 8 here 24914.008

U.S. Food and Drug Administration, CDER 

As drug applicants often publicly acknowledge, they routinely take the intellectual property rights 

of previously approved drug products into account when making determinations regarding the 

design and development of their proposed drug products. While our approval standards are the 

same whether or not an applicant designs its proposed product around a competitor's 

intellectual property rights, the proposed products that FDA receives for review and 

consideration for approval are no doubt impacted by patent considerations. 

Conclusion 

Thank you for your interest in the important topic of the safety, efficacy, and availability of 

epinephrine auto-injectors. FDA takes our public health mission seriously and, as discussed 

at:;ove, is working hard to fulfill our role as it relates to this issue. In addition to working to assure 

the safety and efficacy of life-saving products like epinephrine auto-injectors, it is critical that 

they be made to high quality standards to ensure they will work as needed. As a part of our 

mission, FDA also has an important role to play in advancing public health by helping to speed 

innovations that make medicines more effective, safer and more affordable. For complex 

medical products such as epinephrine auto-injectors, this means providing a road map to 

developers seeking to market new products and working with them wherever possible in support 

of new product development. As a part of this work, FDA understands the importance of generic 

products in the U.S. marketplace. We hope that our efforts, coupled with the work of other 

groups that also have roles to play, will continue to ensure medications are readily available to 

patients. I am happy to answer any questions. 

September 21, 2016 7 
16 


KING-6430 with DISTILLERInsert offset folio 9 here 24914.009

912012016 About the Center for Drug Evaluation and Research> Douglas Throckmorton, M.D., Deputy Center Director for Regu!atOfy Programs 

Douglas Throckmorton, M.D., Deputy 

Center Director for Regulatory Programs 

As Deputy Director for Regulatory Programs, Dr. Throckmorton shares the 

responsibility for overseeing the regulation of research, development, manufacture 

and marketing of prescription, over-the-counter, and generic drugs in the United 

States. He is committed to ensuring that the benefits of approved drugs outweigh 

their known risks. 

Dr. Throckmorton received his medical degree from the University of Nebraska 

Medical School and completed his residency and fellowship at Case Western 

Reserve University and Yale University, respectively. Prior to coming to the FDA in 

1997, he conducted basic science research and practiced medicine at the Medical 

College of Georgia, Augusta, Georgia and Augusta Veterans Administration 

Hospital. He is a board-certified physician. 

COER Leadership WOOOllg Together for Sole & E!recliVe DtugS 

Related Information 

• COER Leadership Bios (!AboutFDA/CentersOffices/OfficeofMedicaiProductsandTobacco/CDER/ucm374526.html 

More in About the Center for Drug Evaluation and Research 

UAboutFOAICentersOffices/OfficeofMedlcaiProductsandTobacco/COER!default.html 

COER Offices and Divisions (!AboutFDA/CentersOffices/Officeo!MedlcaiProductsandTobacco/CDERiucm075128.html 

Drug Safety Oversight Board 

(!AboutFDA/CentersOffices/OfficeofMedica!ProductsandTobacco/COERJucm082129.html 

Jobs at the Center for Drug Evaluation and Research (COER) 

l/AboutFDA/CentersOffices/Officeo!Medlca!ProductsandTobacco/CDERiucm081244,html 

Meeting Presentations <Drugs) 

l/AboutFDA/CentersOffices/Officeo!Medica!ProducjsandTobacco/CDERiucm074833,html 

1ttp://wwwJda.gov/AboutFDA!CentersOffices/OfficeofMedicaiProductsandTobacco/CDERiucm374!X)1.htm 
17 

Chairman CHAFFETZ. Thank you. 

Ms. Bresch, you’re now recognized. 

STATEMENT OF HEATHER BRESCH 

Ms. BRESCH. Good afternoon, Chairman Chaffetz and Ranking 

Member Cummings and members of the committee. I’m Heather 

Bresch, the CEO of Mylan, and I appreciate the chance to be with 

you today. 

Before I answer your questions, I would like to share with you 

a little information on my background in Mylan and tell you what 

we have done in the last weeks to address the concerns about the 

price and the availability of EpiPens. 

I grew up in a small town in West Virginia in a close family with 

a strong work ethic. I joined Mylan in 1992 as an entry-level clerk 

performing basic administrative tasks in the basement of the company’s manufacturing facility and worked through 15 different 

roles in the company until I reached my current position. When I started with Mylan, our sales were approximately $100 

million with less than 500 employees, and today our sales are in 

excess of 11 billion with more than 40,000 employees, and 1 in 13 

U.S. prescriptions is filled with one of Mylan’s medications. 

I would like to highlight just two facts about Mylan. First, we 

aren’t the kind of niche pharmaceutical company that offers only 

a handful of products. In fact, we are the exact opposite. Over the 

last 55 years, we have grown to offer more than 2,700 products, 

predominantly generic, made at more than 50 manufacturing facilities capable of producing up to 80 billion doses annually, and we 

see the need to do more. 

This year alone we will invest approximately 1.2 billion in research and development and manufacturing, or roughly 3 million 

a day, to bring affordable access to many more complex products 

such as insulins and biosimilars. 

Second, our business is predicated on high volumes of hundreds 

of products. In the U.S. alone, we offer a portfolio of 635 products, 

which translated last year to more than 21 billion doses available 

to patients, at an average price to Mylan of 25 cents. Over the last 

decade, Mylan’s medicines have reduced the U.S. healthcare costs 

by approximately 180 billion. 

This is an EpiPen. It may look simple, but it is actually quite 

complex. In the event of anaphylaxis, a severe allergic reaction, the 

more than 15 critical components in this device must work every 

time, and in seconds, to deliver medicine to treat life-threatening 

symptoms quickly and without fail, many times self-administered 

by the person in the state of anaphylaxis. 

Before Mylan acquired the company that owned EpiPen in 2007, 

fewer than 1 million of the 43 million people at risk had access to 

an epinephrine auto-injector. At the same time, it was estimated 

that anaphylaxis was causing 1,500 deaths annually. We’ve read 

stories of children dying at school because they did not have access 

to an epinephrine auto-injector or due to a lack of education about 

the need. We saw this as an unacceptable and largely preventable 

health problem. 

We’ve worked diligently and invested to enhance EpiPen and 

make it more available. In fact, we have invested more than $1 bilVerDate Nov 24 2008 09:42 Apr 12, 2017 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 H:\24914.TXT APRIL

KING-6430 with DISTILLER
18 

lion in these efforts over the last few years and have succeeded on 

many fronts. We put an improved EpiPen device on the market in 

2009. We now reach 80 percent more patients. And today, approximately 85 percent of EpiPen patients pay less than $100 for two 

and a majority less than $50. 

We have made great strides in providing access to EpiPens in 

public places, starting with schools. In the last 4 years alone, 

Mylan provided 700,000 free EpiPens to more than 66,000 schools 

across America with no strings attached. Our pens were used hundreds of times, including on many children who had no known allergies. 

I know there is considerable concern and skepticism about the 

pricing of EpiPens, and I think many people incorrectly assume 

that we make $600 off of each pen. It’s simply not true. Recent 

EpiPen price increases have not yielded the revenue to Mylan that 

many assume. 

In the complicated world of pharmaceutical pricing, there is 

something known as the wholesale acquisition cost. Since 2014, the 

wholesale acquisition cost for two EpiPens increased from 401 to 

608, or 51 percent. But the net revenue to Mylan, after rebates and 

fees, what we actually received, increased from 235 to 274. In other 

words, the annual increase to Mylan for the last 2 years was approximately 8 percent per year, or 16.6 percent cumulatively, during this period. 

From that, you must subtract our cost of goods, which is $69. 

This leaves a balance of $205. After subtracting EpiPen-related 

costs, our profit is $100, or approximately $50 per pen. 

In the last few weeks, we have confronted the EpiPen issue head 

on. Our program has four parts. We announced the first-ever generic of the EpiPen product, which will be priced at $300. This unprecedented move is the fastest and most direct way to reduce the 

price for all patients. 

Second, we are creating a direct-ship option, allowing patients to 

purchase the generic product directly from Mylan. 

Third, we increased our EpiPen savings card for the brand product from 100 to 300. 

And fourth, we doubled our eligibility of patients receiving free 

pens from 48,600 to 97,200 for a family of four. 

With these changes, our profit per pen will be substantially lower 

than it is now. 

I’m honored and proud to be the CEO of Mylan, and I’ve spent 

my entire career working to break down barriers to access and expand access to high-quality medicine and lower healthcare cost. I 

wish we had better anticipated the magnitude and acceleration of 

the rising financial issues for a growing minority of patients who 

may have ended up paying the full wholesale acquisition cost or 

more. We never intended this. We listened and focused on this 

issue and came up with an immediate and sustainable solution. 

Going forward, we will continue our leadership in developing 

high-quality medicine and expanding access. 

Thank you. 

[Prepared statement of Ms. Bresch follows:] 


KING-6430 with DISTILLER
19 


KING-6430 with DISTILLERInsert offset folio 10 here 24914.010

Testimony of My/an CEO Heather Bresch before the United States House of 

Representatives Committee on Oversight and Government Reform 

Wednesday, September 21, 2016 

I'm Heather Bresch, the CEO of Mylan. 

I appreciate the chance to be with you today. Before I answer your questions, I would 

like to share with you some information on my background and Mylan, and tell you what 

we have done in the last few weeks to address concerns about the price and availability 

of EpiPen® Auto-Injectors. 

I grew up in a small town in West Virginia, in a close family with a strong work ethic. I 

joined Mylan in 1992 as an entry level clerk, performing basic administrative tasks in the 

basement of the company's manufacturing facility. 

I've worked in 15 different roles since joining the company. When I started with Mylan, 

our sales were approximately $100 million. Today, our sales are in excess of $11 billion, 

and 1 in 13 U.S. prescriptions is filled with one of Mylan's medications. 

I'm proud to be the CEO of Mylan, but I never expected to be here under these 

circumstances-discussing the price of EpiPen Auto-Injectors. I've spent my entire 

career working to break down barriers, expand access to high quality medicines and 

lower healthcare costs. 

As with anyone, our record isn't perfect - and I know you have many important 

questions you want to ask - but what's also extremely important is the tremendous 

amount of good Mylan has done for millions of patients in the U.S and around the world. 

I want to highlight two facts about Mylan. First, we aren't the kind of niche 

pharmaceutical company that offers only a handful of products. In fact, we are the exact 

opposite. Today, we offer more than two thousand. seven hundred different products. 

Over the last 55 years, we have grown to more than 40,000 employees, with more than 

50 manufacturing facilities, capable of producing up to 80 billion doses annually. 

As primarily a generic pharmaceutical company, we must invest heavily in research and 

development and manufacturing in order to produce billions of doses and bring 

hundreds of new products to market every year. This year, for example, we will spend 

approximately $1.2 billion on R&D and manufacturing facilities, or roughly $3 million per 

day. 

Second, our business is predicated on high volumes of hundreds of products. In the 

U.S. alone, we offer a portfolio of 635 products, which translated last year to more than 

21 billion doses made available to patients, at an average price to Mylan of 25 cents per 
20 


KING-6430 with DISTILLERInsert offset folio 11 here 24914.011

dose. Over the last decade, Mylan's medicines reduced U.S. healthcare costs by 

approximately $180 billion. 

This is the EpiPen device ... 

It may look simple, but it is actually quite complex. In the event of a severe allergic 

reaction, the more than 15 critical component parts in this device must work EVERY 

TIME ... IN SECONDS ... to deliver medicine to treat life threatening symptoms quickly and 

without fail. 

For millions offamilies, the presence of an EpiPen Auto-Injector in a purse, briefcase, 

backpack or medicine cabinet is a source of enormous comfort and an invaluable 

insurance policy against a potential tragic event. 

It troubles me greatly that the EpiPen product has become a source of controversy. I 

understand the focus of this hearing is primarily about our pricing of EpiPen AutoInjectors. I'm prepared to address that issue in depth. At the same time, the issue of 

EpiPens has two equally critical dimensions - price and access. With the current focus 

on pricing, I'm very concerned that the access part of the equation is being minimized. 

When Mylan acquired the company that owned EpiPen Auto-Injectors in 2007, not only 

was there low awareness of anaphylaxis, but fewer than 1 million of the 43 million 

people at risk had access to an epinephrine auto injector. At the same time, it was 

estimated that anaphylaxis was causing 1 ,500 deaths annually, or more than 4 per day. 

And many people who suffer a severe allergic reaction requiring epinephrine had no 

known history of a severe allergy. We read stories of children dying on playgrounds 

because schools didn't have access to epinephrine to use on children without a 

prescription in their name. We saw this as an unacceptable and largely preventable 

health problem. 

In the more than 8 years we have owned the EpiPen product, we have worked diligently 

and invested to enhance the product and make it more available. In fact, we have 

invested more than one billion dollars in the efforts. On many fronts we have 

succeeded. We put a much improved EpiPen device on the market in 2009. We've also 

invested so that we can soon offer a longer shelf life, which means patients will go 

longer before needing a refill. 

We have now reached 80% more patients. And today, approximately 85 percent of 

EpiPen patients pay less than $100 for a 2 unit package and a majority pay less than 

$50. 

And we've made great strides in providing access to EpiPen Auto-Injectors in public 

places, starting with schools. In the last four years alone, Mylan provided seven 

hundred thousand free EpiPen Auto-Injectors to more than 66,000 schools across 

America, with no strings attached. 

2 
21 


KING-6430 with DISTILLERInsert offset folio 12 here 24914.012

I hope these facts will be considered in the larger discussion about price. Price and 

access exist in a balance, and we believe we have struck that balance. But we don't 

want to go back to a time - not that long ago - when awareness of anaphylaxis was 

much lower and epinephrine auto injectors were only available in schools with a 

prescription for an individual child. Achieving this level of expansion of awareness 

requires significant investment. 

I know there is Considerable concern and skepticism about the pricing of EpiPen AutoInjectors. I think many people incorrectly assume we make $600 off each EpiPen. This 

is simply not true. 

In the complicated world of pharmaceutical pricing there is something known as the 

Wholesale Acquisition Cost or WAC. The WAC for a 2 unit pack of EpiPen AutoInjectors is $608. After rebates and various fees, Mylan actually receives $274. Then 

you must subtract our cost of goods which is $69. This leaves a balance of $205. After 

subtracting all EpiPen Auto-Injector related costs our profit is $100, or approximately 

$50 per pen. 

The misconception about our profits is understandable, and at least partly due to the 

complex environment in which pharmaceutical prices are determined. The pricing of a 

pharmaceutical product is opaque and frustrating, especially for patients. 

In the last few weeks, we've confronted the EpiPen issue head on. Our program has 

four parts: 

We announced the first ever generic version of the EpiPen product, which will be priced 

at $300. This unprecedented move is the fastest and most direct way to reduce the 

price for all patients. 

Second, we are creating a direct ship option, allowing patients to purchase the generic 

product directly from Mylan for $300. 

Third, we increased our My Epipen Savings Card program benefit for the brand product 

from $100 to $300. 

Fourth, we doubled the eligibility of patients receiving free pens from $48,600 to 

$97,200 for a family of four. 

Looking back, I wish we had better anticipated the magnitude and acceleration of the 

rising financial issues for a growing minority of patients who may have ended up paying 

the full WAC price or more. We never intended this. We listened and focused on this 

issue and came up with a sustainable solution. 

I understand your concern about EpiPen Auto-Injectors, but I ask that you look at our 

overall record for this patient population and our response to the challenge. 

3 
22 


KING-6430 with DISTILLERInsert offset folio 13 here 24914.013

Going forward, we will continue our leadership in developing high quality medicines and 

expanding access. 

4 
23 

Chairman CHAFFETZ. Thank you. I’ll now recognize myself. 

Ms. Bresch, you never anticipated it? You raised the price. What 

did you think was going to happen? 

Ms. BRESCH. Well, thank you, Chairman. 

We raised the price over 8 years. And we raised that price, and 

I think what is incorrectly assumed is that 608 is what Mylan receives. We receive $274 of that 608. 

Chairman CHAFFETZ. So here is what I don’t understand. Explain to me, when you buy the generic version, what’s the difference in the generic version? Is it just the name? 

Ms. BRESCH. It will be the same product with epinephrine autoinjector on it. It will be the same product. 

Chairman CHAFFETZ. So suddenly it’s $608. Now you’re going to 

have a generic of the generic, and that’s going to be $300? 

Ms. BRESCH. Yes. 

Chairman CHAFFETZ. And if they spend 300, I’m sorry, they get 

two? 

Ms. BRESCH. Yes. 

Chairman CHAFFETZ. So your revenue is actually going to go up 

on the direct product because you say you only get $275 now. 

You’re going to get $300, correct? 

Ms. BRESCH. Well, I think the direct ship will be a very—we’re 

trying to do that in case—to catch everybody. We’re hoping that at 

least 85 to 80 percent—— 

Chairman CHAFFETZ. You’re actually raising the price. You’re actually raising the price. 

Ms. BRESCH. No, sir. Our net—— 

Chairman CHAFFETZ. You’re going to have more revenue. 

Ms. BRESCH. Our net sales will absolutely go down. Our net per 

pen will go down dramatically. 

Chairman CHAFFETZ. How does your net per pen go down when 

you’re collecting, as you say, I don’t know that I believe you, but 

$274, and under the direct program you’re going to collect $300? 

Ms. BRESCH. But from that then you take the cost of goods out, 

which is $69, and then—— 

Chairman CHAFFETZ. Which is the same on both. 

Ms. BRESCH. And then you take out the EpiPen drug-related 

product. 

Chairman CHAFFETZ. Wait a sec, Ms. Bresch, come on, you’re very bright here. If you’re collecting $274 or $275 for two right 

now, and you’re going to do the generic to save people money, 

you’re going to charge $300, your revenue goes up. How does it go 

down? 

Ms. BRESCH. But that’s not—we said that will be the wholesale 

acquisition cost, is 300. We’ve cut the wholesale acquisition cost in 

half from 300—— 

Chairman CHAFFETZ. And the only thing you changed was the 

name. The only thing you changed is the name. This is why we 

don’t believe you, is that if the price goes from 608 to 300, your collection on that is actually higher, and you’re telling me that your 

net profit is going to go down? 

Ms. BRESCH. Sir, what I’m saying is the wholesale acquisition 

cost—and I know I’ve provided this, too, if you want to put it up— 

the wholesale acquisition cost is what is going to 300. What we will 


KING-6430 with DISTILLER
24 

actually receive we’re estimating at 200, we believe it will be less 

than that, just as what we receive is the 274. 

Chairman CHAFFETZ. You said you’re going to sell it direct. 

Ms. BRESCH. We offer that as an option. There’s still—— 

Chairman CHAFFETZ. How much does that cost to a consumer? 

$300 is what you told us. 

Ms. BRESCH. Sir, we hope that everybody will get it through the 

channels of the—all of the programs. The patient reduces the cost 

for everybody across all the channels. 

Chairman CHAFFETZ. Wait, wait, the patient reduces the cost. 

Explain that to me. 

Ms. BRESCH. By introducing a generic, which truly is unprecedented, I mean, we cut the price in half, so I know that—— 

Chairman CHAFFETZ. Well, it’s unprecedented to raise the price 

$500—or 500 percent. So you’re raising it to lower it, but your net 

revenue goes up. How can you claim it goes down? 

Ms. BRESCH. What we receive is the 200, and we’re estimating 

that. 

Chairman CHAFFETZ. You said you’re telling it direct for 300. 

Ms. BRESCH. We said that the wholesale acquisition price would 

be 300. 

Chairman CHAFFETZ. You’ve got to help clarify this for us because this does not make sense. And I don’t know how you suddenly offer that generic. 

Let me go to Dr. Throckmorton for a second. 

What is the current FDA backlog overall, not just for the epinephrine, overall what is the current backlog on the drug approvals 

at the FDA? 

Dr. THROCKMORTON. Currently there are around 2,300 abbreviated new drug applications that we are reviewing. That is not 

backlog. The backlog I believe you’re referring to would be the 

products that were in the queue prior to 2012, prior to the passage 

of the—— 

Chairman CHAFFETZ. And what’s that number? 

Dr. THROCKMORTON. The number of products that were in the 

queue in 2012 that remain unreviewed, less than 100. We have reviewed well over 90 percent of those products and provided feedback to the sponsors. 

Chairman CHAFFETZ. How many epinephrine-oriented products 

are in the pipeline right now? 

Dr. THROCKMORTON. I can’t answer that question, I’m afraid, 

Congressman. I can tell you that—— 

Chairman CHAFFETZ. No, no, no, wait. Do you know that number? 

Dr. THROCKMORTON. I do not know that number right now, sir. 

Chairman CHAFFETZ. We’re having a hearing about this. Do you 

know that number? 

Dr. THROCKMORTON. What I can tell you is—— 

Chairman CHAFFETZ. Look, here’s the thing. They may tell you 

at the FDA: Hey, we don’t ever talk about this. I don’t care, okay. 

Congress doesn’t care about that. I want to know how many epinephrine-oriented products are in the queue right now. 

Dr. THROCKMORTON. I wish that I could answer that question, 

sir, but—— 


KING-6430 with DISTILLER
25 

Chairman CHAFFETZ. When can you give me that answer? 

Dr. THROCKMORTON. I can get back whatever information I can 

to you as quickly as I can. 

Chairman CHAFFETZ. Are you going to get back the answer to the 

question I asked? 

Dr. THROCKMORTON. I’ll be able to provide whatever information 

I can. 

Chairman CHAFFETZ. Are you going to answer the question that 

I asked? 

Mr. LYNCH. Mr. Chairman. 

Chairman CHAFFETZ. Yes. Mr. Lynch. 

Mr. LYNCH. Just on a parliamentary inquiry. We’ve done this before with witnesses, we give them 5 minutes to go out in the hallway there and call the people at his office and get that answer for 

you. I think it’s a pertinent question and you should have an answer. 

I yield back. 

Chairman CHAFFETZ. How hard is it to get this answer? Who 

knows that answer? 

Dr. THROCKMORTON. It’s simply a legal answer. I’m not allowed 

to—— 

Chairman CHAFFETZ. It’s simply a what? 

Dr. THROCKMORTON. A legal answer. I’m not allowed to disclose 

commercial confidential information in this setting. And my understanding is that—— 

Chairman CHAFFETZ. Let me talk about it with staff here as this 

hearing progresses. I don’t want to slow it down for just that. But 

it is a question we want to understand the answer to, and I do 

think we should be able to get this. 

Last question, Ms. Bresch. This came up late in the process. It 

was a surprise to us. But can you explain or clarify, from your own 

vantage point, the role that your mother played in this process? I 

mean, we’re reading these articles that seem sensational. I don’t 

know what’s true, what’s not true. I’m giving you an open-ended 

opportunity to express your version of what is going on there. 

Ms. BRESCH. And I greatly appreciate that. The article is completely inaccurate. 

We, Mylan, when we acquired this product and realized the complete lack of awareness and access to the product, and the fact that 

public places, let’s take schools, that if a child at a school or on a 

playground were to go in and have a severe allergic reaction, go 

into anaphylaxis, and if that child didn’t have a prescription in 

their name at that school, the school couldn’t use it. 

So there were deaths in schools happening because there may 

have been EpiPens or other epinephrine auto-injectors, but they 

weren’t allowed to be used, and children, like I said, tragically died. 

We saw this as unacceptable. So there had only been a handful 

of States that had started to recognize that epinephrine autoinjectors could be in a public place in a school’s name, not in a 

child’s name, therefore, the nurses and trained administrators 

could use it in the case of a tragic event. 

We then started helping, and I applaud the Federal legislatures 

as well as State legislatures who quickly recognized these tragic 


KING-6430 with DISTILLER
26 

events and that they could be largely preventable, and legislation 

began to get passed to allow schools to stock epinephrine. 

We then launched our EpiPen for Schools program, which, as I 

said, we’ve given 700,000 free pens to over 66,000 schools with no 

strings attached, and I hope that one of the benefits of this would 

be that the other 65,000 schools will participate and receive free 

EpiPens. 

During this period of time, you know the burden on schools from 

a policy perspective, training perspective, so we gave amounts to 

various groups, whether it was the National School Board, National Education Association, National School Nurses, that we 

could help, and only helping to fund them train personnel and educate so that people could recognize an anaphylactic event and know 

how to use and know how to administer product. 

My mother has dedicated her life to education, has been a volunteer for years, and rotated 1 year into the president of the National 

School Board in 2012, and then rotated out. We have continued to 

work with these organizations to continue to help train and educate. 

So while people may want to criticize Mylan for giving free pens 

and having access in public places to EpiPens, I certainly thought 

it was a very cheap shot to bring my mother into this. 

Chairman CHAFFETZ. I now recognize Mr. Cummings. 

Ms. BRESCH. Thank you. 

Mr. CUMMINGS. Thank you very much. 

Ms. Bresch, on August 29, the committee sent you a bipartisan 

request for documents. We included a simple request, and I quote, 

‘‘We ask for the company’s profits from the sales of EpiPen for each 

year since acquisition,’’ end of quote. Do you recall getting that? 

Did you see that? 

Ms. BRESCH. Yes, sir. 

Mr. CUMMINGS. Ma’am? 

Ms. BRESCH. Yes, sir. 

Mr. CUMMINGS. Your company has started to produce documents, 

and we appreciate that. We now have information about your marketing expenses and a number of other costs. 

But one thing that is absent, Ms. Bresch, from your document 

production is your profits for each year. Given how much you are 

now charging for EpiPen, I think the American people have a right 

to know how much you and your fellow executives are making off 

of the exorbitant prices you’re charging for this drug. 

So let’s start with last year. I see you’ve got all kinds of charts, 

so maybe this is on one of those charts. How much profit did you 

make in 2015 from the sale of EpiPens? In 2015. 

Ms. BRESCH. So, sir, what I think we provided is what I did as 

in my testimony, is that about $50 per pen is our profit, and that’s 

just direct EpiPen. It’s not taking any kind of company allocation 

or anything else out of that other than just direct related EpiPen 

cost. 

Mr. CUMMINGS. Have you got a number for me? How many did 

you sell? 

Ms. BRESCH. We sold—I’ll give you, roughly, over the last 12 

months number, roughly, about 4 million packs of two. So 8 million 

pens, but 4 million packs of two. 


KING-6430 with DISTILLER
27 

Mr. CUMMINGS. Okay. And according to the documents, you had net revenues of $912 million in 2015 for EpiPens, and that was 

after all rebates and discounts. Is that right? 

Ms. BRESCH. Yes, sir. What we recognize is the $274 per pen, 

and so our revenue is calculated on that average of what Mylan receives. 

Mr. CUMMINGS. And so according to these documents, you spent $97 million on marketing in 2015 alone, and that is a huge 

amount, and that’s what the documents say. So that brings you to 

a number—your number down to about 815 million. Wouldn’t you 

agree? 

Ms. BRESCH. Sir, I’m not sure what documents or what you’re— 

what I can confirm is that we absolutely have spent—— 

Mr. CUMMINGS. You don’t know how much you’re making off of 

these pens? 

Ms. BRESCH. We’ve spent about a billion dollars on EpiPen since 

2008. 

Mr. CUMMINGS. So the next documents say you spent $255 million on costs of goods sold in 2015. So that brings the total to 560 

million, and that’s pretty simple math. So okay, so you have patient assistance programs and school-based programs for EpiPens, 

but the documents do not say how much you spent on them last 

year. So how much did you spend on those programs in 2015 for 

EpiPens? 

Ms. BRESCH. Sir, I don’t have the exact breakout, but, like I said, 

when I took the walk from 274 with cost of goods coming out at 

$69, which gets you to about the $205, and then down, about $105 

for EpiPen-related costs, which is what takes you to the $100 for 

two or the $50 per pen of profit. 

Mr. CUMMINGS. The fellow behind you is getting a chart, and 

maybe that will help us. 

Ms. BRESCH. Okay. 

Mr. CUMMINGS. So this is your biggest product. Is that right? 

Ms. BRESCH. Yes, sir. 

Mr. CUMMINGS. And are you telling me you don’t know how 

much you spent on patient assistance programs and school-based 

programs last year? Is that what you’re saying? 

Ms. BRESCH. I just don’t have it broken out. I said about $105 

would be the EpiPen related, so all of those costs from marketing 

as well as the patient assistance program, and everything else that 

we spent on the product. 

The disease awareness, we’ve done quite a bit on just anaphylaxis itself, that because there was such a low awareness of even 

what anaphylaxis was. Over the last 8 years, the ability to really 

be able to educate about not only is anaphylaxis something that is 

obviously life-threatening, but we now know that at least 25 to 30 

percent of the time, when someone goes into anaphylaxis, they’ve 

never had a known allergy before, whether a child or adult, which 

really drove our need to want to get it in public places. 

Mr. CUMMINGS. So that leads me to the next question. I know 

we’ve got some 43 million people that are a possible customer base, 

but let me ask you this. Let’s talk about R&D. How much did 

Mylan spend on research and development projects that directly related to EpiPens in 2015? 


KING-6430 with DISTILLER
28 

Ms. BRESCH. Sir, actually we’ve spent over the years trying to do 

several things that failed and trying to—— 

Mr. CUMMINGS. Can we talk about 2015? 

Ms. BRESCH. And we hope that within the next 12 months we’ll 

have approved a new formulation that will extend the shelf life, 

which means—— 

Mr. CUMMINGS. That’s not what I asked you. I said, how much 

did you spend on R&D in 2015? And I think the hearing is about 

EpiPens. And I’ve got to tell you, I talked about in my opening 

statement about rope-a-doping, that’s what I’m feeling like. I mean, 

I feel like you’re not giving me answers, ma’am. 

And I think, in fairness to us, you knew what this hearing was 

about, you knew what our concerns were, and I just, I’m asking you 

questions that—you’re the CEO? 

Ms. BRESCH. Yes, sir. 

Mr. CUMMINGS. That I would think you would know. I mean, 

seems like this stuff would be jumping out of the top of your head. 

Ms. BRESCH. Sir, as a company, Mylan spent $750 million this 

year, is what we’re projected to spend on R&D. For EpiPen it’s not 

broke down so much in products. 

What I can tell you is that our overwhelming majority of what 

we’ve spent has been on access and awareness programs. We have, 

like I said, we’ve been developing over the years, working on smaller different devices due to patient feedback. What we have been 

successful in is reformulating it so it will have a longer shelf life, 

and that will extend the time needed between refills. 

But the majority of our—— 

Mr. CUMMINGS. Can we stop right there, right there? 

Ms. BRESCH. Sure. 

Mr. CUMMINGS. Let’s put a pen in that one. This longer shelf life, 

how are we coming with that? Right now it’s about a year. Is that 

right? 

Ms. BRESCH. Eighteen months. 

Mr. CUMMINGS. Eighteen months. So how long are we trying to 

get it up to? Because I heard that it was a year, but I’m glad to 

hear it’s 18 months. But go ahead. 

Ms. BRESCH. So—— 

Mr. CUMMINGS. What are your researchers—what are you projecting? 

Ms. BRESCH. Twenty-four months is what we’re hopeful for, and 

maybe even longer, but a minimum of 24 months. 

Mr. CUMMINGS. How soon will we know, do you think? What do 

your researchers—since you’re spending all this money on it, what 

are your researchers telling you, how soon do they say they’ll have 

an answer? 

Ms. BRESCH. Sir, we’re looking to submit it within days to the 

FDA. We’ve been working on this for a couple of years. And it will 

be with 24 months that you do kind of—you continue to—after you 

submit it to the FDA, you’re able to continue to work on stability, 

and that there is an opportunity that it could go longer. But we, 

at a minimum, 24. 

Mr. CUMMINGS. I’m running out of time. I only have about a 

minute left. How about this? Would you agree that you made hunVerDate Nov 24 2008 09:42 Apr 12, 2017 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 H:\24914.TXT APRIL

KING-6430 with DISTILLER
29 

dreds of millions of dollars in profit in 2015 based on the sale of 

EpiPens alone? 

Ms. BRESCH. Sir, we have an $11 billion company. I run an $11 

billion company. And, yes, EpiPen is our largest product, but by no 

means driving the entire performance of our company. 

Mr. CUMMINGS. Now, you answered my question. So you agree 

that you made hundreds of millions of dollars in profit in 2015 

based on the sale of EpiPens? 

Ms. BRESCH. Yes, sir. 

Mr. CUMMINGS. Thank you. 

Ms. Bresch, here is what—I’m almost finished—Ms. Bresch, here 

is what I want. I want you to produce to this committee a breakdown for each year for the past 10 years since you acquired this 

drug in 2007. I want you to include a detailed list of all your costs 

for each year, all of your expenses for each year, and all of your 

profits for each year for EpiPen. And that’s what we asked for 

nearly a month ago. 

And the chairman is real big on documents, and I am too, and 

we want to—it makes it—it’s very unfair to us when we ask you 

for documents and we don’t get what we want. Because what that 

means is, is that the hearing is over, as I said before, you go back, 

you fly back to wherever, you know, your company is, and we are 

then—we have then lost a chance to get the kind of information we 

need. 

With that, I yield back. 

Chairman CHAFFETZ. I thank the gentleman. 

I now recognize the gentleman from Florida, Mr. Mica for 5 minutes. 

Mr. MICA. Thank you, Mr. Chairman. 

Dr. Throckmorton, there is no generic available for competition 

to the EpiPen, or is there? 

Dr. THROCKMORTON. There is no generic product to any auto-injector formulation of epinephrine. The generic form that Ms. Bresch 

is talking about is a so-called authorized to generic, which, as has 

been previously characterized, is the brand name product marketed 

without the brand name on its label. That it is the generic the way 

we—— 

Mr. MICA. Do you have under consideration, I guess it would be 

public knowledge, anyone producing, attempting to produce generic 

competition? 

Dr. THROCKMORTON. I think it’s public knowledge that there are 

companies that are looking at that. 

Mr. MICA. You would have to approve them. Do you have any 

being considered for approval now? 

Dr. THROCKMORTON. I can’t comment on any specific applications. I can tell you—— 

Mr. MICA. No, but do you have applications now? 

Dr. THROCKMORTON. They would have to be approved by us. 

Mr. MICA. How long have you had the applications? 

Dr. THROCKMORTON. I’m not—I’m sorry, I can’t comment. 

Mr. MICA. You can’t tell us. 

Dr. THROCKMORTON. I’m sorry I can’t comment about this. 

Mr. MICA. Because we need to know. I mean, one way to bring 

the price down is to have competition. Wouldn’t that be correct? 


KING-6430 with DISTILLER
30 

Dr. THROCKMORTON. I absolutely agree with that. 

Mr. MICA. Can you let the committee know for the record how 

many applications you have—you don’t even have to tell us the 

name—and how long you’ve had them and how long you’ve been 

processing? 

Dr. THROCKMORTON. I’m sorry, I can’t provide that information 

to you. 

Mr. MICA. I can’t—that’s not acceptable, to come here on this 

subject and not have that answer. 

So the pen is available, and I understand under the Affordable 

Care Act there is some exceptions to that. Is that correct? 

Dr. THROCKMORTON. I’m sorry, I don’t understand. 

Mr. MICA. Under the Affordable Care Act, is the EpiPen available? 

Dr. THROCKMORTON. Currently, there are two products that are 

available on the market. Both of them have been approved as new 

drug products. So the first is the EpiPen. The other is a product 

called Adrenaclick, which is another epinephrine auto-injector that 

prescribers can write for and is available through pharmacies. 

Mr. MICA. How long would it take to get a generic approved and 

on the market? 

Dr. THROCKMORTON. Beginning in October, on October 1, we’ve 

committed to 10-month review times for any new application. Some 

products—— 

Mr. MICA. I want to know how long you’ve had any applications. 

You can’t tell me—— 

Dr. THROCKMORTON. I’m sorry, I can’t provide that information, 

but I can tell you that in addition to the 10-month clock that we’ve 

committed to, beginning on October 1, some products that are particularly high public health value, including so-called first generics, 

are eligible for priority review. So those things would happen more 

quickly. 

Mr. MICA. Thank you. 

Ms. Bresch, in a media interview, you said: ‘‘As the health insurance environment has evolved, driven by the implementation of the 

Affordable Care Act, patients and families enrolled in high-deductible health insurance plans, who are uninsured, or who pay cash 

at the pharmacy, have faced higher costs for their medicine.’’ 

Is that correct? 

Ms. BRESCH. Yes. 

Mr. MICA. And the chairman talked and the staff had talked 

about the ingredients cost about a dollar. Is that correct? 

Ms. BRESCH. No, sir, we pay $69 for the cost of goods, for the 

EpiPen. 

Mr. MICA. $69. 

Ms. BRESCH. For two. 

Mr. MICA. For two. Is this your major profit center for the company? 

Ms. BRESCH. So, sir, it represents—— 

Mr. MICA. Is this your major profit center? 

Ms. BRESCH. It’s our largest product. 

Mr. MICA. Is it your major profit center? 

Ms. BRESCH. So it’s—we have, like I said—— 

Mr. MICA. It’s your major profit center. 


KING-6430 with DISTILLER
31 

Ms. BRESCH. It’s our largest product, but we have—— 

Mr. MICA. And one of the things that concerns us, some people 

can’t get this for their family, their kids, the prices are high. There 

isn’t competition, and then it’s also reported that the top five executives within your company earned a collective $292 million from 

2011 to 2015. Is that correct? 

Ms. BRESCH. Sir, I think that there is—— 

Mr. MICA. Is that correct? 

Ms. BRESCH. I don’t—— 

Mr. MICA. Okay. Well, what’s your salary, what was your salary 

last year? 

Ms. BRESCH. About $18 million. 

Mr. MICA. About $18 million. Sounds like you’re doing pretty 

well on this. 

How does your compensation compare to peers in the industry? 

Ms. BRESCH. It’s in the middle. 

Mr. MICA. It’s in the middle. So there are some with even bigger 

salaries? 

Ms. BRESCH. Yes, sir. 

Mr. MICA. Okay. Were your payments or executive compensation 

packages tied to the result of EpiPen sales? 

Ms. BRESCH. No, sir. EpiPen’s performance is a factor in Mylan’s 

overall performance, but the board sets the compensation based on 

Mylan’s overall performance. 

Mr. MICA. My time is up, but I have other questions I’ll submit 

to the witness. 

Mr. WALBERG. [Presiding.] I thank the gentleman. The gentleman’s time has expired. 

I now recognize the gentlelady from the District of Columbia, Ms. 

Norton. 

Ms. NORTON. Thank you, Mr. Chairman. I appreciate this hearing. 

Could I ask you, Ms. Bresch, after an avalanche of criticism, perhaps the worst—and that is really saying something—of any pharmaceutical in recent memory, will you reverse the increase in price 

of EpiPens? 

Ms. BRESCH. So, Congresswoman, thank you. We have, by the introduction of a generic, which has never been done before. I mean, 

an unprecedented event for a brand to cannibalize their own. So 

we—to $300. 

Ms. NORTON. And that you did in response to the criticism. 

That’s your response to the criticism you’ve gotten from the public 

long before you came to this hearing, but nothing about the brandname product. Is that right? 

Ms. BRESCH. Because the way that we can make the most immediate impact to the patient—— 

Ms. NORTON. Would be to reduce the price of the brand-name 

product. 

Ms. BRESCH. But that would not be guaranteed to flow through 

to the patient. What we did was to give immediate relief to the patients that fall under this—— 

Ms. NORTON. But that was your concern. You know, this just 

might not go to the patient, so we will go immediately to—— 


KING-6430 with DISTILLER
32 

Ms. BRESCH. Yes. Our concern was absolutely that everyone who 

needs an EpiPen has one. And so putting a generic into the market 

would, we believe, be the most effective and efficient way to make 

that happen. 

Ms. NORTON. I asked staff, because there have been some responses from you about this being only one of your products, how 

much, how substantial was EpiPen. I was amazed by the answer 

that—and I would ask you to verify this—that Mylan is 0.3 percent 

of the products, percent of the products you produce, but 10 percent 

of the revenue. 

Ms. BRESCH. EpiPen is less than 10 percent, a little less than 10 

percent of our overall—— 

Ms. NORTON. But only about three one-hundredths of the products you produce? 

Ms. BRESCH. Because we absolutely produce billions and billions 

of doses; in the U.S., 21 billion doses. 

Ms. NORTON. Yes, but, you know, this turns out to be a minute 

amount of the products you produce, yet out of that comes 10 percent of the revenue. 

What bothers me, when we try to—what we ought to do is compare you with others, because you’re certainly not the only one. The 

ranking member brought up the names of others who have become 

notorious. But even in that notorious grouping, Mylan is 11th in 

revenue in the drug industry. Can you confirm that? 

Ms. BRESCH. I’m not—no, I’m not sure. 

Ms. NORTON. That is our information. And unless you get back 

to us with different information, 11th in revenue in the entire drug 

industry, which is perhaps the most criticized sector of an economy, 

and 16th by market capitalization, and that Mylan is paying its executives far more, for example. You have already testified that you earned $18 million. That is last year. I understand you earned $2.45 million in 2007. So you 

got a hefty increase. But from $2.5, less than 10 years ago, to $18 

million last year. That’s the figure? 

Ms. BRESCH. I am blessed and fortunate, not only financially, but 

to have worked with this company for 25 years and to—— 

Ms. NORTON. Could I ask you this: What have you done to earn 

a 671 percent increase? What have you done to earn that kind of 

increase? 

Ms. BRESCH. Well, I believe Mylan has done a tremendous 

amount, starting with—— 

Ms. NORTON. No, I’m asking what you have done. I’m interested 

in your compensation. What have you done to earn that kind of an 

increase, 671 percent increase in less than 10 years? 

Ms. BRESCH. I would say, starting with saving the U.S. over the 

last 10 years $180 billion. Our products alone have saved this 

country $180 billion. 

Ms. NORTON. I’m talking about—I’m talking about this product. 

This product. 

Ms. BRESCH. I’m talking about Mylan, but my compensation—— 

Ms. NORTON. I’m talking about this product, Ms. Bresch, this 

product. What have you done? Is your compensation based on what 

you’ve done with this product, which turns out to be the epicenter 

of your products for—of the many products you make? So I’m tryVerDate Nov 24 2008 09:42 Apr 12, 2017 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 H:\24914.TXT APRIL

KING-6430 with DISTILLER
33 

ing to find out what you’ve done about this product that has earned 

such an increase. 

Ms. BRESCH. First, I would say having 700,000 free EpiPens 

across 66,000 schools across America, could not be more proud 

about that, and hope that we can get them in the other 65,000. 

Ms. NORTON. For which you will, of course, then want another 

increase. 

Thank you, Mr. Chairman. 

Mr. WALBERG. The gentlelady’s time has expired. 

I now recognize the gentleman from Tennessee. 

Mr. DUNCAN. Thank you very much, Mr. Chairman. 

And, first of all, I want to associate myself with the opening remarks of both the chairman and the ranking member. And according to MBC, since it’s been brought up by the previous question, 

according to MBC, Ms. Bresch made $18,931,068 in 2015. I suppose 

when you get to salaries at the level that we’re talking about, it’s 

easy to forget an extra $931,000. But the greed is astounding. It’s 

sickening. It’s disgusting, almost any words that you can think of 

and not only by Ms. Bresch but the other executives. 

And I am a very conservative pro-business Republican, but I am 

really sickened by what I’ve heard here today and what I’ve read 

before about this situation. I can tell you that, in my opinion, nobody can really earn or deserve $19 million a year. 

And lest anyone be under a misunderstanding that the free market or capitalism hasn’t worked here, you don’t have a free market. 

That’s the problem. A true free market, you have ease of entry. You 

certainly don’t have that in the drug industry. And, also, you have 

plenty of competition in a true free market, and you don’t have 

that here. And it’s primarily the fault of the FDA. We’ve let the— 

I’ve read article after article, for many years, we’ve let the Food 

and Drug Administration become so big and so bureaucratic that 

it’s become almost impossible for a small company to get a drug or 

a medical device to market. And the cost of getting a drug or a 

medical device to market, on average, has become in many cases, 

most cases over a billion dollars to get a drug to market. And because of that, the drug industry has ended up in the hands of a 

few big giants. 

And then I’ve read article after article that all these giant drug 

companies and pharmaceutical companies have hired many or most 

of the former FDA Commissioners and top-level employees, just 

like the Defense Department—defense contractors have hired so 

many retired admirals and generals. And what they’ve done in the 

drug industry, they’ve come in and they’ve manipulated the market. 

Now, Ms. Bresch justifies all this, saying that they only get $274 

from the EpiPens, but these pens were selling by this other company, this German company, for $100 in 2007. We’ve only had I 

think around 30 percent inflation in those years, and yet they have 

almost tripled the price that this German company was paying. 

Then Congress, with good intentions, made the situation worse 

by giving incentives for the schools in grants to get these pens. And 

then I understand that the New York State attorney general is getting ready to investigate Mylan, because they have required— 


KING-6430 with DISTILLER
34 

they’ve given these first pens out for free as marketing devices but 

then required them to buy the next times they had to buy pens. 

But what does concern me, one thing that really concerns me, according to a September 1st story on NPR, the FDA as of July had 

4,038 generic drug applications awaiting approval, and the median 

time it takes for the FDA to approve a generic is now 47 months. 

That doesn’t sound like a very expedited procedure to me, Dr. 

Throckmorton. 

And then it says, in March, generics giant Teva Pharmaceuticals, 

another giant, told investors that its generic version of EpiPen was 

rejected by the FDA and that it now wouldn’t be able to launch the 

generic at least until next year. Another pharmaceutical company, 

Adamas—I’m not sure if I’m pronouncing that correctly—reported 

a similar rejection from the FDA in June. So that’s two pharmaceutical—two giant companies that have been turned down. 

Dr. Throckmorton, the FDA needs to speed up its actions, and it 

needs to allow more competition, and it’s not doing that now and 

in the opinion of I think almost everybody here. And then it’s all 

being done on the backs of sick children, and it’s shameful. 

Mr. Chairman, thank you. 

Mr. WALBERG. I thank the gentleman. 

I recognize my colleague Mr. Clay for 5 minutes. 

Mr. CLAY. Thank you, Mr. Chairman. 

Ms. Bresch, since I have a limited amount of time, I want to ask 

you a series of yes-and-no questions, and then I will give you an 

opportunity to respond in more detail if you’d like at the end. 

First, epinephrine, obviously, is an essential lifesaving drug, correct? 

Ms. BRESCH. Yes. 

Mr. CLAY. The formulation of epinephrine, the active drug in the 

EpiPen, has not changed since 2007, correct? 

Ms. BRESCH. The pen has changed. The device has changed. But 

the epinephrine—— 

Mr. CLAY. The formulation of the—— 

Ms. BRESCH. Right. 

Mr. CLAY. —drug has not. Do you admit that you have raised the 

price of EpiPens by more than 400 percent since acquiring it in 

2007? 

Ms. BRESCH. Yes, the wholesale acquisition cost has increased. 

Mr. CLAY. Do you admit that Mylan has spent millions and millions of dollars to expand the EpiPen market? 

Ms. BRESCH. Yes, and to expand access. 

Mr. CLAY. And according to press reports, on September 17, 

2015, you stated at a conference, and I quote: ‘‘We are continuing 

to open up new markets, new access with public entity legislation 

that would allow restaurants and hotels and really anywhere you 

are congregating, there should be access to an EpiPen.’’ 

Did you make that statement? 

Ms. BRESCH. Yes, sir. 

Mr. CLAY. In 2012, a settlement agreement was reached with 

Teva Pharmaceutical Industries, preventing it from putting a generic on the market until 2015 or earlier under certain circumstances. Is that correct? Is that correct? 

Ms. BRESCH. Yes. Yes, sir. 


KING-6430 with DISTILLER
35 

Mr. CLAY. Do you admit that by delaying the entry of a generic 

drug into the marketplace, Mylan has had less competition? Do you 

admit that, that you had less competition by that delay? Not youall delaying, but having the delay. 

Ms. BRESCH. But we’ve had competition to EpiPen every year. 

Mr. CLAY. Okay. The New York Times reported that although 

Mylan, and I quote, ‘‘was once taking two 10-percent price increases a year, it has made two 15-percent increases annually 

starting in 2014, when the generic competition seemed imminent.’’ 

Do you admit that, in anticipation of generic competition, Mylan 

raised the price more sharply than it had in the past? 

Ms. BRESCH. Not due to generic competition. We did increase the 

wholesale acquisition cost, but as I’ve stated, we get 274 out of the 

608. So, over that time period, we received an average of 8 percent 

increase. 

Mr. CLAY. So, raising the price, do you admit that these price increases were intended to generate even more significant revenue 

before generics entered the market? Was that the intent of the 

raising the price, that you-all receive additional revenues? 

Ms. BRESCH. We certainly received additional revenue, but on 

274, just not the 608. 

Mr. CLAY. Have you ever witnessed an individual having an epileptic seizure? I grew up in the 1960s and 1970s, and I had a friend 

who I witnessed on a couple of occasions these seizures. Have you 

ever seen an individual have a seizure? 

Ms. BRESCH. Due to anaphylaxis? 

Mr. CLAY. Yes. 

Ms. BRESCH. No, sir. 

Mr. CLAY. Well, it’s not a pretty sight. And it’s—I mean, look, 

modern medicine has advanced in a way that’s beneficial to patients, but to have companies like yours take advantage of this situation, take advantage of these people who are really in need of 

this medication, I think it speaks to something that is—that we are 

better than that. 

And I would hope that corporate America, that the pharmaceutical industry is better than that. I mean, look, in the last few 

seconds, tell me what—you know, how did we get to this point, that 

we have a culture like this in corporate America that wants to stick 

it to consumers? 

Ms. BRESCH. And, sir, all I can speak to is our culture, which 

Mylan has for over 50 years spent and invested in being able to 

produce low-cost pharmaceuticals and provide access. As I mentioned, over 21 billion doses, we’ve saved this country over $180 billion. So our premise is to provide access. And what we worked on 

with EpiPen was to be able to give 700,000 free pens to schools 

with no strings attached, nothing—— 

Mr. CLAY. But initially you put it out of reach of the average consumer. 

Mr. WALBERG. I thank the gentleman. The gentleman’s time has 

expired. I think the question was answered. 

I now recognize myself for 5 minutes of questioning. 

Recent news articles, Ms. Bresch, have documented a lobbying effort on behalf of Mylan to add the EpiPen to the list of preventative 

medical services managed by the U.S. Preventive Services Task 


KING-6430 with DISTILLER
36 

Force. Preventive medical services are those that prevent illnesses 

before they cause symptoms or problems, as I understand it. 

Currently, treatments receiving a grade of A or B by the task 

force are required to be offered to the consumers with no out-ofpocket costs. Supporters of adding the EpiPen to the list of preventive medical services argue that this measure will help consumers 

get access to EpiPens with no cost-sharing. 

So, Ms. Bresch, will adding the EpiPen to the preventive medical 

services list, will it do anything to lower the actual price of the device, the overall reason for our hearing today? 

Ms. BRESCH. So the preventive—the preventative drug list, as 

you mentioned, would make sure everyone has access. But what 

we’ve now done with the generic drug and dropping the price to 

300, we believe provides that similar access but believe that, obviously, the importance of epinephrine auto-injectors should be part 

of the preventative drug list. 

Mr. WALBERG. So you are still pushing to have it on that list? 

Ms. BRESCH. I absolutely still think it should have—— 

Mr. WALBERG. Even with the generics? 

Ms. BRESCH. Yes. 

Mr. WALBERG. Do you believe that spending lobbying resources 

to add the EpiPen to the preventive medical list and thus shifting 

the price of the drug to other sectors is a realistic solution to stem 

rising drug prices? 

Ms. BRESCH. But, sir, that’s why what we did was so unprecedented. It wasn’t to shift. We dropped the price by half by introducing the generic. 

Mr. WALBERG. But you still want it on that list? 

Ms. BRESCH. Just to ensure that—just showing the importance 

of epinephrine. 

Mr. WALBERG. Why not reduce the price instead of spending 

those lobbying resources? 

Ms. BRESCH. Sir, there has been—the lobbying resources have 

been primarily about creating access and getting epinephrine in 

public places, like schools and eventually—just like a defibrillator. 

I mean, what we recognized is that when you need one, seconds 

count, and they should be where you are. So—— 

Mr. WALBERG. Absolutely. We don’t disagree with that at all. 

And we appreciate the fact that the product can be there and can 

be useful. 

But this list also, I think we need to plumb the depths of that. 

We’ve gone the generic route; we’ve had some questions on that. 

But the list also—won’t this, in fact, just shift the full cost of 

EpiPens to government payers, such as Medicaid, Medicare, health 

insurers, employers, eventually leading to an overall increase in 

premiums and other copays on consumers? 

Ms. BRESCH. No, sir. We believe, by, one, putting the generic in 

like we have at 300, over 85 percent of our patients pay minimal 

out-of-pocket costs. So, by now reducing it by half, it even reduces 

that further. So this is not all about cost-shifting. It’s just making 

sure everyone has access and understands the importance of epinephrine. 


KING-6430 with DISTILLER
37 

Mr. WALBERG. It certainly takes the pressure off of bad publicity 

for cost factor to get it paid for by Medicare, Medicaid, et cetera, 

the process. 

Let me shift over to Mr. Throckmorton, because there definitely 

is a concern about just the delay, the time period, the bureaucratic 

maze. Some drug companies are taking advantage of your agency’s 

failure to approve more generic drugs. I think we’ve seen that. We 

are questioning that today. 

What can we do to expedite approvals to ensure we have multiple generic competitors to prevent drastic price spikes? And we 

heard testimony in our last go-round that said it’s a lot of bureaucracy. What are we doing to get to that? 

Dr. THROCKMORTON. So thank you for that question. I want to 

take issue slightly with that characterization of where we are as 

an agency. There was a time when our resources were not able to 

keep up with the applications that we were receiving for true generic drug products, not authorized generic but true drug products 

approved under the abbreviated new drug applications. 

There was a time in 2012 when we were—we did have the backlog. We had over 4,400 applications that needed to be reviewed. In 

2012, with Congress’ help, we got additional resources, allowing us 

to hire new individuals, put in place new processes. The result of 

that have been over 2,200 approvals or tentative approvals since 

2012. So we have, in fact, made progress in reaching conclusions 

regarding approvals of true generic products. 

Mr. WALBERG. What about the markets? Are you doing anything 

to identify markets that are at risk of becoming monopolized by a 

single generic? 

Dr. THROCKMORTON. Absolutely. We, first and foremost, agree 

with everything that has been said today about the power of competition and the importance of us taking that challenge on, us making it possible to develop new products. In particular, when you are 

talking about products like auto-injectors for epinephrine, the public health value is even higher. And we understand, for those products, we need to put particular work, attention. 

We’ve made several—we’ve done several things specifically about 

difficult-to-develop products like the epinephrine auto-injector. I 

mentioned a couple of them earlier, the guidances that we have put 

out, talking about how to put these products on the market efficiently, quickly, how we’re going to review the data, the kinds of 

information you need. 

In addition, we meet with any company that comes to us with 

a product that has this public health value. We offer to meet with 

them individually. We offer to respond to their questions in writing. We have put out—— 

Mr. WALBERG. I appreciate that. My time is expired. But I would 

make a statement that if there are companies that are having difficulty, I certainly think that members on this panel would love to 

hear directly from them and then come directly to you—— 

Dr. THROCKMORTON. I would welcome—— 

Mr. WALBERG. —and ask those questions, because we want to 

deal with this. We want to have the competition. We want to see 

the price reduced. And we don’t want to have hearings like this on 

a regular price. 


KING-6430 with DISTILLER
38 

Dr. THROCKMORTON. If there is a case, I hope they call. 

Mr. WALBERG. My time is now expired. 

I now recognize Mr. Lynch of Massachusetts for his 5 minutes of 

questioning. 

Mr. LYNCH. Thank you, Mr. Chairman. Ms. Bresch, I want to go back to the $50 profit number you’ve been giving us today. Last year, the price was about $460 per 2– 

Pak. Is that right? So let’s go to your chart there. That’s not what 

I have. 

The numbers, the documents you gave us are totally deficient in 

terms of trying to figure out how much you’re charging people and 

how much it costs you, just so you know. And I know we have some 

outstanding document requests for your company, so I really hope 

you can comply with those as soon as possible to help the committee with its work. 

So let’s even just go off your chart there: $401 one year, that was 2014; 530 in 2015; and then a whopping $608 this year so far. So 

how much money were you making per EpiPen back in 2014 then 

when you were charging $400? 

Ms. BRESCH. So, sir—— 

Mr. LYNCH. Please, not another chart. Can you just—— 

Ms. BRESCH. I’m just saying that the 235—— 

Mr. LYNCH. I’m not talking about that. I’m talking about the top 

price. 

Ms. BRESCH. We received—— 

Mr. LYNCH. I’m talking about the overall price. 

Ms. BRESCH. We received $235. 

Mr. LYNCH. Look, that’s not what I’m asking you. Can you just answer the question? When you were charging $400 back in 2014, 

how much were you making? 

Ms. BRESCH. Equivalent to the $50, approximately $50 here. 

Mr. LYNCH. Okay. Okay, $50, fair enough. 

Ms. BRESCH. I think it was about $40. 

Mr. LYNCH. $40? 

Ms. BRESCH. Yes. 

Mr. LYNCH. Okay. $40 back then? 

Ms. BRESCH. I believe it was approximately—— 

Mr. LYNCH. Okay. 2015, you went up to $500. How much were 

you making that year? 

Ms. BRESCH. Out of the—we received 219 and—— 

Mr. LYNCH. No, no, no. 

Ms. BRESCH. —out of that, the profit was probably about—it was 

around $38. 

Mr. LYNCH. $38. Okay. And now it’s up to $50 this year? 

Ms. BRESCH. Approximately. 

Mr. LYNCH. Okay. So if you’re only making $50 this year, you 

must have been losing money in the previous years, because you’ve 

gone up $200 on the overall price, the top price, and you’re still 

only making $50. I just can’t understand that. The numbers don’t 

work, based on the documents you’ve given us. 

Ms. BRESCH. So, sir, the 608 is the wholesale acquisition cost. 

The price to Mylan is 274. 

Mr. LYNCH. Yeah, we’ve done that dance. We’ve done that dance. 

I understand that. 


KING-6430 with DISTILLER
39 

Ms. BRESCH. And then it’s 50—approximately $50 of profit off of 

the 274. 

Mr. LYNCH. Mr. Throckmorton. 

Oh, let me ask you, Ms. Bresch, do you do business with the VA? 

I know it’s a different population and the EpiPens are usually for 

kids with allergies, but—— 

Ms. BRESCH. Yes, sir, we do. 

Mr. LYNCH. Okay. What is the VA paying? 

Ms. BRESCH. I’m not sure of the cost, but I know it’s—— 

Mr. LYNCH. They have the ability to negotiate their own drug 

prices. 

Ms. BRESCH. Yes, sir. 

Mr. LYNCH. It’s a hell of a lot less, I bet. 

Ms. BRESCH. Yes. We’ve had a—— 

Mr. LYNCH. So maybe that’s what we ought to do for Medicare 

and Medicaid and everybody else, let them negotiate their own 

drug prices directly with the pharmaceutical companies. That’s 

what I think should happen here. That’s really what—I think 

maybe—it was not your intention, but I think it might have helped 

Congress get around an issue by showing the blatant disregard you 

have and disrespect you have for people who desperately need this 

medication. 

And you talk about expanding the ability for people to have the 

EpiPen. People in my district can’t do it at $608, can’t do it. And 

a lot of those people don’t have discounts. They’re regular middle 

class people. They don’t have that discount. And Medicare part D, 

their increase is—I know the access went up by 164 percent since 

you bought the company from Merck, but the cost increase are up 

1,151 percent, based on a study here that I have from Juliette 

Cubanski and Patricia Neuman. I want to enter this for the record. 

Mr. WALBERG. Without objection. 

Mr. LYNCH. It’s disgraceful what’s going on here, but I think, in 

a way, like I say, you’ve done us a little bit of a favor here by just 

showing you what’s wrong with this system, what’s wrong with our 

healthcare system. I think it’s disgusting. 

I’ll yield back. 

Mr. WALBERG. The gentleman yields. 

The chair recognizes the gentleman from Tennessee, Mr. 

DesJarlais, for 5 minutes. 

Mr. DESJARLAIS. Thank you, Mr. Chairman. 

Ms. Bresch, I just wanted to try to get inside the mind of a large 

drug company CEO for a minute. When did you guys sit down and 

decide after 2008—you acquired the EpiPen—when did you decide 

to use this model of price increase, and how did you come to that 

decision? 

Ms. BRESCH. It was first recognizing the fact that there’s a severe shockingly low understanding of anaphylaxis, and there is a 

shockingly low number of people who were prepared or protected 

with EpiPen. 

Mr. DESJARLAIS. So you decided you should raise the price? 

Ms. BRESCH. No, sir. We committed to investing in this product, 

which we have about over a billion dollars over this 8 years to provide access. 

Mr. DESJARLAIS. And how much have you made over 8 years? 


KING-6430 with DISTILLER
40 

Ms. BRESCH. It is absolutely our largest product, but—— 

Mr. DESJARLAIS. No. I just said, how much have you made? You 

said you invested a billion dollars. You know how much you invested. How much did you make? 

Ms. BRESCH. I don’t have the cumulative number. 

Mr. DESJARLAIS. So you know what you spent. Okay. Do you think that you are charging too much? Do you think $600 is too 

much, or are you going to keep raising the price? 

Ms. BRESCH. Sir, which is why we took the unprecedented action of putting the generic in at $300. 

Mr. DESJARLAIS. Okay. We’ll get to that. But did you plan on increasing the price in 2017? 

Ms. BRESCH. No, sir, we did not plan on raising the price. 

Mr. DESJARLAIS. Okay. But you did have a plan then to raise it 

every year for 5 or 6 years? 

Ms. BRESCH. And if you look at what we received out of that 

money—— 

Mr. DESJARLAIS. I just asked you a question. Did you have a 

plan to raise the price every year for 6 years and then stop? 

Ms. BRESCH. We have raised the price. We have raised the price. 

And I think managing to—what we received, that 274 out of the 

608 is what we were managing. 

Mr. DESJARLAIS. You are obviously proud of your company. You 

think that was fair then to raise the price each year to that point, 

even though you got a drug at $100, which was probably too much 

for the drug, considering what the cost is. I know you made a fancy 

clicker, because I had one of your reps come by my office back in 

2009 or 2010 and show me how to use it. So I know that cost a 

little bit of money. But, generally, when a drug goes to generic, 

doesn’t the price go down? 

Ms. BRESCH. Which is why we dropped it to $300. 

Mr. DESJARLAIS. Only after you jacked it up to $600. It’s like if 

I go buy this tie and they say it’s $600 but were going to sell it 

to me for $300, that doesn’t make it worth $300. You fixed the 

price on the drug and now you know—when did you know you were 

going to release the generic? 

Ms. BRESCH. We announced it several weeks ago. 

Mr. DESJARLAIS. Okay. But when did you know as a company? 

I mean, you knew it was coming. You’ve got a gentleman sitting 

next to you say it takes months, maybe years. 

Ms. BRESCH. No, sir. We’re putting an authorized generic in the 

market which is equivalent to EpiPen. 

Mr. DESJARLAIS. Okay. So we’re supposed to feel good because 

you’ve taken a drug that you’re overcharging six times what it’s 

worth and you’re going to drop the price to 300. 

Ms. BRESCH. Sir, we were receiving $274 out of the $608. 

Mr. DESJARLAIS. Do you think you were charging too much at 

$600? 

Ms. BRESCH. Sir, we believe it was a fair price, and we’ve just 

now lowered that price by half. 

Mr. DESJARLAIS. Why did you lower it by half if you thought it 

was fair? If you thought it was fair, leave it where it’s at. 

Ms. BRESCH. Because we wanted to make sure we’re addressing 

the patients out there that are facing higher out-of-pocket costs and 


KING-6430 with DISTILLER
41 

paying the wholesale acquisition cost, which was not intended. The 

system wasn’t intended for people to pay the wholesale acquisition 

cost, and that’s what’s happening at an alarmingly rising rate, 

which is—we took the unprecedented step of putting the generic in 

to sidestep that and be able to lower the cost for—— 

Mr. DESJARLAIS. You’re doing everyone a favor by charging three 

times what you acquired the drug for as a generic. If you’re trying 

to make us feel good about that, I just don’t. I’m not buying your 

argument. Do you have a guilty conscience about any of this? 

Ms. BRESCH. Over that period of time, putting it in public places, 

giving free—700,000 free EpiPens to 66,000 schools and wanting to 

get it into all of the public schools across America. 

Mr. DESJARLAIS. Well, if it cost 20 bucks, they could afford to 

buy their own. You wouldn’t have to give them to them. But, instead, you chose to jack the prices up and then somehow make everyone want to feel good about you by saying how much you do. 

The bottom line is you took a very inexpensive drug and you 

profited handsomely off it. And I don’t have a problem like a lot 

of my colleagues that you can make money in a free market enterprise, but what I do have a problem with, as a physician, when you 

take drugs that are lifesaving drugs—and people don’t have a 

choice. They can’t go to a different department store to get their 

tie. They have to have that drug, because, you know, a mother 

would cut off her right arm to get that dose of drug. You decided 

to charge 600 bucks instead of cutting off her arm. And now you’re 

saying you’re dropping it to $300 and that should make us all feel 

better when, in fact, that’s probably about 10 times what the drug 

should cost. 

And I understand you got to make some money, but you can really sit there with a clear conscience today and say that that’s okay 

and you just decided, because you’re such a good company, to cut 

the price from $600 to $300? I mean, is that your testimony? 

Ms. BRESCH. Congressman, we want everyone who needs an 

EpiPen to have an EpiPen, and we’re going to continue to work to 

expand access. 

Mr. DESJARLAIS. Lower the price so they can afford it. Are you 

going to lower the price so other people can afford it? 

Ms. BRESCH. We believe that all the programs that we put in 

place, from the generic to the higher—patient assistance program 

to the copay card. So trying to address every facet of patients to 

make sure they can have access to EpiPens is what we will remain 

focused on. 

Chairman CHAFFETZ. [Presiding.] I thank the gentleman. 

I now recognize the gentleman from Virginia, Mr. Connolly, for 

5 minutes. 

Mr. CONNOLLY. Thank you. 

Ms. Bresch, I was listening to your earlier testimony, your formal 

testimony, and I was just struck with what humanitarians you people of Mylan really are. And if you listen to your testimony, you’d 

never know what the uproar is about. Do you understand the nature of the uproar? 

Ms. BRESCH. I do, sir. And I truly believe it’s—the story got 

ahead of the facts, because I think people had—because of the complexity around the pharmaceutical system, I think that us being 


KING-6430 with DISTILLER
42 

able to now release, put on the record what we’re making, what 

comes to Mylan, in fact, is making $50 a pen. 

Mr. CONNOLLY. You will forgive me. I only have 5 minutes, so I 

have to manage my time like you have to manage yours. I don’t 

mean to cut you off, but I want to get to some questions. 

Okay. So let me get this straight in terms of the chronology and 

sequencing. You took over the previous manufacturer in 2007, 

Mylan did. Is that correct? 

Ms. BRESCH. Correct. 

Mr. CONNOLLY. And beginning in that time—the price of EpiPen 

had been fairly stable up to that point. Is that correct? 

Ms. BRESCH. Yes. The product—— 

Mr. CONNOLLY. Yes. So, since 2007, you’ve raised the price 15 

times, if I understood it correctly. About that? 

Ms. BRESCH. Yes, sir. 

Mr. CONNOLLY. Yeah. So what happened between 2007 and 2016 

different than the previous manufacturer and producer? Did production costs skyrocket for you? 

Ms. BRESCH. Cost of goods increased for sure. 

Mr. CONNOLLY. Well, how much? 

Ms. BRESCH. Almost 100 percent over that period—— 

Mr. CONNOLLY. 100 percent. And what was the comparable cost 

on the price of EpiPen in that 100-percent cost increase? 

Ms. BRESCH. I’m saying over the last 8 years. 

Mr. CONNOLLY. Right. And I’m saying, what did it—you went 

from what to what in 8 years in what you charged, maximum 

price? I took your point that not everyone pays that. I understand. 

We have a medical system where we have all kinds of different layers of pricing. 

But, nonetheless, the cost to consumers, at least as pegged at an 

official cost, what was the comparable increase? While you’re absorbing in 8 years 100 percent you say, 100 percent cost to you to 

produce, what was the comparable cost, in theory, to consumers, 

maximum cost increase in that time period that you charged by 

raising costs 15 times, a price? 

Ms. BRESCH. And, sir, today that is $274 that we receive for the 

EpiPen. 

Mr. CONNOLLY. Well, I was asking for a percentage increase. 

Let’s do apples and apples. If you’re going to contend that production costs went up 100 percent, all right, what is the comparable 

price increase for consumers during that time period? Your own 

testimony, you’ve acknowledged you raised the price 15 times. 

Ms. BRESCH. Sir, I believe it’s almost 300 percent. 

Mr. CONNOLLY. 300 percent. So presumably, that’s profit. 

Ms. BRESCH. After—I mean, from that—— 

Mr. CONNOLLY. The delta. 

Ms. BRESCH. After the cost of goods come out and then you take 

out all other EpiPen-related costs. 

Mr. CONNOLLY. Well, I got to tell you, unlike some of my colleagues, I don’t care what your profit is. I mean, America is built 

on profits. Profits are an incentive. What I care about is what you 

charge consumers who have no choice. If I understand it, you’ve got 

a stranglehold on the market. You control 94 percent of this market. Is that correct? 


KING-6430 with DISTILLER
43 

Ms. BRESCH. Sir, we have a large market share. We don’t control. 

At any point in time—— 

Mr. CONNOLLY. All right, I’ll withdraw the word ‘‘control,’’ Ms. 

Bresch, if it offends you. You have 94 percent of the market share. 

Ms. BRESCH. Correct. 

Mr. CONNOLLY. Yeah. I’d call that a stranglehold. I’d call that a 

lot of control. You don’t want to call it control, don’t. But consumers are experiencing it a little differently. And so, because you 

have such a stranglehold on the market, you could do what you 

want in terms of pricing, and you have. 

Ms. BRESCH. Sir, we have had many competitors in and out of 

this marketplace. In fact, that just underscores the complexity of 

the product—— 

Mr. CONNOLLY. Your competitors don’t even equal 6 percent of 

the market, Ms. Bresch. I mean, that doesn’t even pass the giggle 

test, what you’re asserting. You virtually have a monopoly and 

you’ve used it to your advantage, but, unfortunately, it’s at the expense of people who need it. 

This is a lifesaving drug in some cases. People who risk 

anaphylactic shock don’t have a choice; they have to use it. And I’m 

wondering what your sense of social responsibility is to those people. I mean, how do you balance—I’m looking—I could go through 

for you statements you’ve made and the company has made in the 

annual report to investors, and it sure is a different set of statements than what we’ve heard here today. 

I didn’t hear the humanism. I didn’t hear the philanthropic call. 

I heard statements about favorable pricing. I heard statements 

about how EpiPen continues to post strong results and has delivered double-digit growth to date. That’s because of your pricing. 

Ms. BRESCH. But, sir, it’s also because we are reaching almost 

double the amount of patients in protecting and having the ability 

to be prepared with an EpiPen. So we absolutely expanded access 

and reach to patients who are at risk, as well as putting them in 

public places like our schools program. 

Mr. CONNOLLY. During the call to investors, one question asked 

to you was, what are the prospects for future price increases for 

EpiPens? This is an investor meeting. And your answer is, and I 

quote: ‘‘You should foresee that just continuing as we continue to 

maximize the EpiPen franchise.’’ What did that mean if it wasn’t 

reassuring investors that we were going to maximize every opportunity to maximize our profit? And, again, I don’t think profitis a 

bad thing, but I do think it’s a bad thing when somebody exploits 

it at the expense of consumers who live on its price or don’t. 

Ms. BRESCH. And, sir, that’s why we have taken every step to ensure everyone who needs an EpiPen has one. And all of our programs, from whether it’s the access program or copay card or the 

schools program, so that our 700,000 free EpiPens throughout the 

65,000 public schools. And we want to reach the other 65,000 public schools. 

Mr. CONNOLLY. Well, again, Ms. Bresch, I think my time is running out. But there’s sort of this Dr. Jekyll-Mr. Hyde, maybe in 

this case Dr. Jekyll-Mrs. Hyde, quality to your testimony. There’s 

one message for us here in the public and quite another for investors. 


KING-6430 with DISTILLER
44 

I yield back. 

Chairman CHAFFETZ. Thank you. 

I now recognize the gentleman from South Carolina, Mr. Gowdy. 

Mr. GOWDY. Thank you, Mr. Chairman. 

Mr. Chairman, as you know, I’m not a physician, which is why 

I was consulting with one, and I’m not an expert in economics, like 

Mr. Meadows and Mr. Mulvaney, but I am trying to understand— 

Ms. Bresch, maybe you can help me. Walk through the different 

chains of delivery for name-brand drugs versus authorized 

generics. From the manufacturer to the patient, what is the difference in the chain of delivery? 

Ms. BRESCH. Do you mean in the product or how it’s distributed? 

Mr. GOWDY. Distributed. 

Ms. BRESCH. So the supply chain for a generic is different than 

the supply chain for a brand. Primarily—— 

Mr. GOWDY. Authorized generic. 

Ms. BRESCH. Authorized generic and a generic would be the same 

channel. 

Mr. GOWDY. Okay. 

Ms. BRESCH. So the distribution channels do differ, primarily 

given the fact that generics are for the retail pharmacy. So there’s 

the supply chain from a pharmacy manager or the formularies differ quite a bit from the brand to the generic. 

Mr. GOWDY. Well, that leads me to another question. I’m sure 

there’s a really obvious answer, but given my background, I don’t 

know what it would be. Why don’t pharmacies just deal with the 

manufacturer? If a doctor has to write a prescription and a pharmacist knows what the prescription is for, why is there a middle 

person in the delivery of drugs? 

Ms. BRESCH. So, sir, for many—on the generics, for many, we do 

deal directly with pharmacies, whether they’re large chains or if 

they’re independents and have—— 

Mr. GOWDY. I guess that’s my point. If you can do it for generics 

and authorized generics, why not for name brands too? 

Ms. BRESCH. Because most of America falls under a formulary of 

payers, and pharmacy benefit managers manage those formularies 

for insurers or for employers. So they manage what products can 

be—it’s tiered. They decide what products can be on a tier two or 

a tier three, so whether it’s preferred or not preferred. So they 

serve as an administrator for most employers. 

Mr. GOWDY. A drug middleman serves as an administrator? 

Ms. BRESCH. As far as deciding what products are on—that 

they’ll reimburse for or at what rate they’ll reimburse for them. 

Mr. GOWDY. Well, let me ask you this: Is it theoretically possible 

that your profit margin could increase with an authorized generic 

as opposed to the name-brand drug? 

Ms. BRESCH. No, sir. It will be considerably less. 

Mr. GOWDY. Walk me through how that would be. You’re cutting 

out the middleman, but yet you’re making less money. How? 

Ms. BRESCH. So there still is—there is still—there is still fees 

and rebates and discounts on the generic side, on the generic channel. They’re just not as significant. So we’re charging, we set a 

wholesale acquisition price at 300, and we estimated that our net, 

what would come to Mylan, would be 200. After you take cost of 


KING-6430 with DISTILLER
45 

goods out of that and EpiPen-related costs, it will certainly be less 

than the $50 that we talked about today around the profit per pen 

that Mylan receives on the brand. 

Mr. GOWDY. I think you answered this question, but I want you 

to do it again for me, just because it’s important. I want this to be 

on the record. Tell me what your—walk me through the cost all the 

way down to what Mylan gets for treating it as a name brand 

versus treating it as an authorized generic. 

Ms. BRESCH. Sure. So this is the math of—you can see the wholesale acquisition, the Mylan revenue of 274 minus the cost of goods 

minus the direct cost, which is the $100 or $50 per pen. And what 

we’ve said for the generic—and what we have said for the generic 

is that the wholesale acquisition would be at 300. Mylan received 

200, less cost of goods, less EpiPen-related cost. So it will be substantially less than the $50 of profit per pen that we receive on the 

brand. 

Mr. GOWDY. Thank you, Mr. Chairman. 

Mr. CUMMINGS. Would the gentleman yield just for one question? 

Mr. GOWDY. I will be thrilled to yield to the gentleman from 

Maryland. 

Mr. CUMMINGS. Thank you. 

Just one question. Just following up on what you just said, it 

seems like you would be taking a loss, unless I’ve got my math 

wrong. When you go to the generic, and you said you’ve got certain 

costs, but it seemed like you would be taking a loss on the generic. 

Am I missing something? 

Ms. BRESCH. Not a loss, sir. I just said we would be making less 

than the $50, substantially less than the $50 per pen we’re making 

today. 

Chairman CHAFFETZ. I thank the gentleman from South Carolina. 

We’re now going to recognize the gentlelady from Illinois, Ms. 

Duckworth. 

Ms. DUCKWORTH. Thank you, Mr. Chairman. 

I want to highlight the stories of two families from my district. 

The Brock family, Lisa and Bob, from Rolling Meadows have an 8- 

year-old son Brian who was diagnosed with severe food allergies 

before he turned 1. Lisa carried an EpiPen for 5 years, and one day 

Brian ate something and began foaming at the mouth and vomiting 

and her nightmare come true. When he came home from the hospital, he told his mom: ‘‘Mom, I don’t want to die.’’ Even at 5 years 

old, Brian knew how serious his body’s reaction was. He knew his 

throat was closing. On this occasion, an EpiPen saved his life. 

Then there’s Michele Hanson from Schaumburg, Illinois. She is 

deeply concerned about Mylan’s skyrocketing prices. Her husband 

Mark and her 7-year-old daughter both have life-threatening peanut allergies. So, as a result, their family has to ensure they have 

two auto-injectors at school, camp, each set of grandparents’ homes 

and mom’s purse. The Hanson family knows what it’s like to depend on this small device for the safety of their family, and that’s 

why Michelle took the time to write to me and urge me to do everything in my power to ensure everyone, even those less fortunate, 

can protect their children with the same level of care. 


KING-6430 with DISTILLER
46 

The Brock and Hanson families are lucky; they have good insurance. But, like Lisa shared with me, we don’t know we’ll always 

be in this position, and one day they may not be able to afford the 

EpiPen, whose prices keep going higher and higher. And I agree 

with Lisa and Michelle. Even a single life lost due to lack of access 

and affordability to this drug is one life too many. 

Now, Ms. Bresch, I’m going to ask you to keep your answers 

short. I’m going to ask you yes-or-no answers or short one-word answers. Please don’t try to filibuster and run up my time. So I need 

you to answer yes or no. 

Earlier, you said that EpiPen has given out over 700,000 

EpiPens—Mylan has given out over 700,000 EpiPens to schools 

across the Nation. Is that correct? 

Ms. BRESCH. Yes, we’ve given free EpiPens. 

Ms. DUCKWORTH. Okay. Mylan also offers schools discounted 

EpiPens through your EpiPens4Schools program. Is that correct? 

Ms. BRESCH. Yes, they can purchase additional pens if they 

want. 

Ms. DUCKWORTH. Okay. So this is particularly important in Illinois, States like Illinois that have laws that require schools to 

stock epinephrine auto-injectors. In fact, this is a program in 

schools that your own mother was instrumental in getting States 

to adopt in her capacity as the president of the National Association of State Boards of Education. 

So we can better understand the scope of this program, from August ’12 through May ’16—May of 2016, approximately how many 

schools signed certification forms purchasing discounted EpiPens at 

a price of $112.10 per carton? 

Ms. BRESCH. Schools that have decided to purchase just additional—besides the four, because we give four free EpiPens—— 

Ms. DUCKWORTH. So how many schools have done this? 

Ms. BRESCH. I think around 5 percent. So I think there has been 

about 45,000 EpiPens. 

Ms. DUCKWORTH. So 45,000 schools? 

Ms. BRESCH. No, no, EpiPens purchased. 

Ms. DUCKWORTH. Okay. How many schools? So answer my question. 

Ms. BRESCH. I’m not sure how many. I don’t know how many 

schools. 

Ms. DUCKWORTH. So, as CEO of Mylan, you don’t know. You just 

quoted a number of how many schools you had given them to and 

how many schools you had not given to and that you wanted to get 

them to all of these other schools, but you can’t tell me how many 

schools have actually bought EpiPens from you under this program 

that you are so proud of? 

Ms. BRESCH. It’s a very small number. It doesn’t—it’s very small. 

The 66,000 schools are who we’ve given free EpiPens to. 

Ms. DUCKWORTH. So I’m also not as concerned about your profit 

making. I believe in the free market. What I am concerned about 

is your monopolistic practices. 

And so there’s a little confusion in public reporting. Could you 

simply confirm, yes or no, whether schools that purchased discounted EpiPens had to make any representation and warrants to 


KING-6430 with DISTILLER
47 

Mylan that they would adhere to certain conditions in order to access the discount price that you give them? 

Ms. BRESCH. Schools did not have to purchase any EpiPens. 

Ms. DUCKWORTH. No, no. The schools that are trying to get the 

discounted price from you, did they have to certify or make any 

representations or warrants to Mylan that they would adhere to 

certain conditions in order to get that price? 

Ms. BRESCH. For people who wanted to buy it at the discounted 

rate, yes. But that had nothing—the free EpiPens had no—— 

Ms. DUCKWORTH. I’m not talking about the free EpiPen. So I’m 

holding here—and, Mr. Chairman, I’d like this entered into the 

record and please pull this up. 

Chairman CHAFFETZ. Without objection, so ordered. 

Ms. DUCKWORTH. It’s a certification form. Thank you, Mr. Chairman. 

It’s a certification form where EpiPen—where Mylan has actually 

said that the school hereby certifies that it will not in the next 12 

months purchase any products that are competitive to EpiPen autoinjectors. 

So you actually put into practice forcing schools—and you are so 

concerned about these kids that you actually are limiting the 

school’s ability to buy pens from someone else. And so you’re saying 

here: ‘‘We’ll sell it to you for 100 bucks. We’ve raised the price to 

$600. If you want it for the 100 buck price that it used to be at, 

you need to sign this and say that you can’t buy this from anybody 

else.’’ Don’t answer. I’m not asking you a question. That’s what 

you’ve done here. 

Ms. BRESCH. Well, I disagree with that, because they did not 

have to buy our pens. Our free EpiPens—— 

Ms. DUCKWORTH. But if they wanted to get this price. 

Ms. BRESCH. If they wanted a heavily discounted price, yes, they 

bought EpiPens. 

Ms. DUCKWORTH. The heavily discounted price is $112.10, which 

is where it was before you jacked up the price to $600. So it’s not 

a discounted price; it’s only discounted because you raised the price 

on them, and then you say: ‘‘Oh, you want it at the old price before 

we jacked it up for profit; here, you need to sign this and say you 

will not buy this from anybody else.’’ Don’t answer. I’m not asking 

you a question. This is what you have done. Your own document 

says it. 

Ms. BRESCH. They don’t have to buy them, and everyone is eligible for a free one. 

Ms. DUCKWORTH. That’s right. You don’t have to buy them. But 

your own mother is out there lobbying to make sure that they’re 

in all the schools. And this article says that many members of the 

board at the NASBE didn’t even know that there was a family connection between you and your—between Mylan and your mom 

through you, as she was out there trying to—passing out your 

guide from Mylan, as she was out there talking to school boards, 

as she was pushing for these EpiPens to be put into school districts. And then they can’t buy it for a lower price, because—— 

Ms. BRESCH. I’m sorry, Congressman. That is completely inaccurate. 


KING-6430 with DISTILLER
48 

Ms. DUCKWORTH. —you control 94 percent of the market. And 

then you tell schools: ‘‘You want it at the old price? Sorry, you can’t 

buy it at the old price unless you promise not to buy it from anyone 

else.’’ That, to me, is an unfair monopoly. 

I yield back, Mr. Chairman. 

Chairman CHAFFETZ. Thank you. 

I now recognize the gentleman from Texas, Mr. Farenthold, for 

5 minutes. 

Mr. FARENTHOLD. Thank you very much. Ms. Bresch, I think I now understand why you make $18 million. 

Trying to figure out the complexities of drug pricing has me really 

flummoxed. Of course, I won’t make $18 million in 100 years serving in Congress. 

So let me ask you, you talk about this wholesale acquisition cost of $608. Who pays $608 for an EpiPen? I mean, what is the wholesale? Is that just kind of like the manufacturer’s suggested retail 

price? 

Ms. BRESCH. So it certainly was never intended for—the wholesale acquisition cost, the system, we certainly didn’t make the system. Mylan didn’t make the system. 

Mr. FARENTHOLD. No, no. I’m not coming after your company, all 

right? I’m very tempted to, because I think you all have behaved 

badly and have invited government regulation. I am a free market 

person. I’m very much for free market. But this whole drug pricing 

system that we have right now makes no sense to me, and a free 

market can’t operate in a system where people like me, who are 

consumers, don’t understand it. 

So I’m going to lay aside my concern about what your company 

is doing and why. I think it’s wrong, but that’s not where I want 

to get. I want to get to the pricing. You said a $600—I’m going to 

call it manufacturer’s suggested retail price. All right. So, in a free 

market, you’ve got a manufacturer, a wholesaler, a retailer and the 

consumer. 

In the drug market, you’ve got the manufacturer. You’ve got the 

insurance company. You’ve got the pharmacy. You’ve got the doctor. You’ve got the benefits manager. And there are probably some 

more players in there, all who need to take a little bit of money 

out. So we’ve created a very complex system. So, basically, you 

said, manufacturer’s suggested retail price is $608. Probably the 

only sucker who’s going to pay that is somebody who doesn’t have 

insurance. I don’t know. And then you come up with all these rebate plans that you have to go to the Web site and print something 

out. You have a discount plan for schools. It’s so incredibly complicated; it makes airline pricing look reasonable. 

I want to fix this, because it’s not just your product that is the 

problem. Medical prices are skyrocketing. Doctors complain to me 

they’re not making any money. My insurance premiums are going 

up. My deductibles are going up. How do we fix this, where you can 

make a reasonable profit and the drug can be available in a way 

that can—at a price that people understand and that doctors know 

and I can talk to my doctor about? 

I mean, I had—my doctor today: ‘‘Great. I got this new pill you 

can take; you only have to take it once a day instead of twice a 

day.’’ Instead of being a $10 copay, it was $120 copay. God knows 


KING-6430 with DISTILLER
49 

what my insurance company is paying. I’m going to take two pills 

to save that kind of money. But in most cases, people and doctors 

even don’t have the information to do that. 

How do we simplify this and get the cost of these down, where 

you can make a profit, the doctor can make some money, the pharmacy can make some money, but people can afford health care? 

How do we fix this? 

Ms. BRESCH. Well, I wish there was a simple answer. The system 

has been around for decades, and it certainly has not kept pace 

with the evolving health care that our Nation faces, the crisis, to 

your point, that health care faces. 

I believe that first there needs to be more transparency in the 

system and certainly welcome the opportunity to sit down in a 

more holistic way and have the conversation. But the whole supply 

chain, to your point, has to be involved in that. 

Mr. FARENTHOLD. Let me ask, Dr. Throckmorton, with the FDA, 

it seems like there may be something you guys can do about this. 

I mean, I see—I had a doctor I was talking to just Monday who 

said: ‘‘Yeah, see this ad for this new drug. Do you realize that it 

costs over $128,000 a year to do that?’’ 

I mean, if you’re not a doctor—and maybe even some doctors 

don’t even know it. Should we be requiring drug companies to disclose the cost of medication in their advertising? 

Dr. THROCKMORTON. That would not be a question for me to answer, Congressman, but a very good question. The FDA is not allowed to consider cost when we look at drug approvals. 

Mr. FARENTHOLD. Ms. Bresch, would your industry be supportive 

of that? 

Ms. BRESCH. I absolutely believe that if we want consumers to 

be able to shop and get them engaged in the system, they absolutely have to know how much something costs to be able to make 

the value proposition. 

Mr. FARENTHOLD. I’m almost out of time. I’ve got one more question for you. 

I applaud your company for trying to educate folks about the 

need for the availability of EpiPens, but what I don’t understand 

is why your marketing costs have to jack up the price that much. 

If you sell 100 EpiPens and make—what was your profit on—$50 

on each pen, and you sell 200 EpiPens at the same price, you’re 

going to make more money—or the same amount of money, you 

see. I didn’t say that correctly. 

But what I’m saying is, as your volume goes up, your profit goes 

up, and you don’t have to jack the price up. That ought to pay for 

the advertising. So if you’d like, I’m out time, I’ll let you answer 

if you want. 

Ms. BRESCH. Thank you. 

Chairman CHAFFETZ. Did you want to answer? 

Ms. BRESCH. Well, I just would say that it’s constantly about trying to reach as many patients as we possibly can. So we continue 

to invest in being able to reach and provide that access. 

Chairman CHAFFETZ. I now recognize Ms. Plaskett for 5 minutes. 

Ms. PLASKETT. Thank you, Mr. Chairman. 

Good afternoon, Ms. Bresch. 


KING-6430 with DISTILLER
50 

It’s my understanding, when we talk about Mylan and the eligibility threshold in your patient assistance program, what has that 

number come to at this point? What is the amount? 

Ms. BRESCH. It is, I believe, 97—97—I believe it’s right around 

97,600 for a family of four. 

Ms. PLASKETT. For a family of four. 

You know, many of us here, including yourself, come from communities where I don’t really know that many of the families that 

make 97,000 as a family of four. You know, where in the Virgin 

Islands, the average amount is about 50,000 for a family of four. 

I would think, you know, in other places that you’re familiar with, 

that would be the case as well. 

How do you as a company deal with those individuals who are 

falling within the margins to be able to afford that? 

Ms. BRESCH. So the patient assistant program is for anyone who 

falls under that 97,200. So it would capture anybody who—a family 

of four making less than that would be eligible for the free pens. 

Ms. PLASKETT. And then what happens to the other families that 

are below that? Do you have other programs? What are you doing 

for those? 

Ms. BRESCH. Anyone below 97,000 would get the free pens, the 

eligibility. 

Ms. PLASKETT. Anyone below that number that’s a family of four? 

Ms. BRESCH. Right. 

Ms. PLASKETT. Okay. So that would mean, in places like myself, 

they would pay—how much then would cost be at that point? 

Ms. BRESCH. It would be free for any family of four making 

$97,000 or less. 

Ms. PLASKETT. So a family of four then that’s above that margin, 

what happens to those families? 

Ms. BRESCH. It could be several. The majority, the overwhelming 

majority of our patients, 85 percent are paying little to—between 

$50, $100, it depends on the commercial plan. But we know that 

about 85 percent or more are paying $100 or less than $50, but 

that’s why we also have the copay card, the savings card that 

would allow you to put that towards what you’re paying at the 

counter. So it would go against your out-of-pocket cost. 

Ms. PLASKETT. So if the individuals, not the companies or not the 

schools that are buying, individuals who purchase this, what percentage you say fall within the PAP, the patient assistance program? 

Ms. BRESCH. It’s very small. Most of our—percentage-wise, the 

majority of our patients are under commercial plans. 

Ms. PLASKETT. What percentage would that be? 

Ms. BRESCH. About 70 to 75 percent, I believe, are in commercial 

plans. 

Ms. PLASKETT. And of that 70 to 75 percent that are in commercial plans, how much do those individuals pay? 

Ms. BRESCH. It varies, depending, because all the plans are different. 

Ms. PLASKETT. What is the variation? 

Ms. BRESCH. The majority pay $50 or less out of pocket. Some 

of that group pays $100 or less out of pocket. And you can use— 


KING-6430 with DISTILLER
51 

we also offer a savings card of now $300 that you can use towards 

any of your out-of-pocket expense. 

Ms. PLASKETT. Okay. That does give some kind of—and it would 

be good if we could get the numbers then of what those individuals 

are so that we understand what percentage of people are really 

having to pay the $600, the $400, and the $300 that really seem 

very outrageous. I’d like to know how many families have to be 

subjected to that. 

Ms. BRESCH. And it’s because of that growing minority that we 

then took the actions we took about putting the generic in place. 

Ms. PLASKETT. Then why would you say that minority is growing? 

Ms. BRESCH. Because of the higher deductibles that people are 

faced to pay, the rise of the higher deductible plans, as you know, 

has grown tremendously, you know, this year alone, and so that is 

having more out-of-pocket cost. And because of that is why we took 

the, like I said, unprecedented step to put the generic in that would 

lower the cost for everybody. 

Ms. PLASKETT. Now, you’re doing other things as well. I understand that you do have some lobbying efforts to get EpiPens listed 

as preventative services under the Affordable Care Act. Is that correct? 

Mr. BRESCH. Yes. We have definitely said it should be on the preventative drug list. 

Ms. PLASKETT. And how much resources have you put towards 

that? 

Ms. BRESCH. Minimal. I mean, it’s been internal resources about 

trying to educate, one, just about the need for epinephrine autoinjectors to certainly make sure everyone has access. 

Ms. PLASKETT. When you say education, who would that be towards? 

Ms. BRESCH. Towards the formularies who make the decision 

about whether or not to put a product on the—— 

Ms. PLASKETT. Who are the formularies, for those of us who are 

uneducated about these kinds of things? 

Ms. BRESCH. So it would be the people that are the large pharmacy managers. So there’s several—many companies out there that 

are the pharmacy managers, and they’re the ones that have some 

decisions around what can go on the preventable drug list or not 

for the lives they cover. 

Ms. PLASKETT. Okay. I’m out of time. I’ve got a lot more questions, but sorry. 

Chairman CHAFFETZ. Thank you. 

I now recognize the gentleman from North Carolina, Mr. Meadows. 

Mr. MEADOWS. Thank you, Mr. Chairman. 

Thank you both for being here. 

Ms. Bresch, your new plan, so let me, as a business guy, let me 

just give you some advice. Parents are upset with the cost of the 

EpiPen and the potential of not being able to help their children. 

That’s the problem you have. 

And what’s happened is I started getting calls when I didn’t even 

know it was an issue from people that were saying the out-of-pocket expense was 600, 700, the insurance wouldn’t cover it. And now 


KING-6430 with DISTILLER
52 

you’ve come up with this unbelievable marketing plan that only 

would suggest that there is unbelievable profits. 

I can’t imagine anybody in their right mind coming up with a 

plan like that, instead of just saying: You know what? We screwed 

up. We knew we had 96 percent of the market, we increased the 

prices, please forgive us, we’ll adjust our prices. So now you’re putting out a generic, you’re coming up with a different plan for a 

great product. 

And I guess my concern is that as we look at this, you’re being 

thrown in with other witnesses that had sat in your same exact 

chair who have really stood out to gouge the American people. And 

I guess my question is, do you believe the increases that you’ve 

done with the market share that you have was inappropriate and 

a mistake from a marketing standpoint? 

Ms. BRESCH. We believe that starting 8 years ago, balancing that 

price and access and making sure that we could not only in public 

places, but reach more lives and reach more patients, was absolutely critical. 

Mr. MEADOWS. So how much is this—— 

Ms. BRESCH. And, look, that’s why we put the generic. 

Mr. MEADOWS. How much of this is a—— 

Ms. BRESCH. That’s why we cut. 

Mr. MEADOWS. How much of this is a Medicaid, Medicare, private insurance, private pay issue where you’re charging different 

amounts to different people? Because that’s another problem I keep 

hearing, is it depends on what plan you’re on and whether you’re 

covered by high deductibles or not. How much of that is just the 

nature of the pharmaceutical business that you charge different 

amounts to different people? 

Ms. BRESCH. You’re correct. I mean, all pharmaceuticals are all 

different under every different plan. 

Mr. MEADOWS. So your pricing model is not, like you say, it cost 

us X, we make X. You have to come up with all kinds of convoluted 

ways to make a profit, depending on the coverage for the individual 

patient. Is that correct? 

Mr. BRESCH. Well, and that’s why we were giving you what we 

receive on an average, the 274. 

Mr. MEADOWS. So I get that. So how are you affording to give free pens to any family that makes less than $97,000 a year? How 

are you affording to do that based on the profit margin? I was 

doing the math. So that just means that if you make $100,000 a 

year, you’re going have to pay a big amount of money, and you’re 

going to give them free to everybody else? Is that what I’m hearing? 

Ms. BRESCH. So, obviously, our patient assistant program is to 

help those families, but the reality is that the majority of the patients fall either with the commercial insurance that have—that 

aren’t facing those huge out-of-pocket costs. 

Mr. MEADOWS. So your increased cost is actually being borne by 

big insurance companies that provide insurance for their employees. Is that what you’re saying? 

Ms. BRESCH. No, sir, that’s what our rebate—— 

Mr. MEADOWS. Is the giveaway figured into that cost? 

Ms. BRESCH. No. The uninsured is really the only person—— 


KING-6430 with DISTILLER
53 

Mr. MEADOWS. So you didn’t figure the giveaway of giving away free EpiPens to people that make $97,000 or less into the cost of 

your product? 

Ms. BRESCH. What gets factored into the cost of product from 

free EpiPens to even our EpiPen for School program—— 

Mr. MEADOWS. It’s part of the overall cost. 

Ms. BRESCH. —we’ve given over 700,000 pens. But really the minority of patients, this uninsured patient that was faced with that 

paying the wholesale acquisition cost or that price is that growing 

minority is why we took the step we did was to say, hey, we’re 

going to—— 

Mr. MEADOWS. Well, I would ask you to revisit that. I’m running 

out of time. I’d ask you to revisit that and make it simpler. 

So, Dr. Throckmorton, let me come to you, because this is another hearing with another problem, and part of the problem is, is 

the FDA has a laborious approval process for any drugs, whether 

they’re orphan drugs or anything else, and your 10-month approval 

process I don’t buy. Is that your testimony today, that you can get 

drugs approved in 10 months, or just a response? 

Dr. THROCKMORTON. Beginning in October 1, we’re committing to 

10-month review time. If it’s a high-quality application—— 

Mr. MEADOWS. But I’ve seen some of those reviews. What you do 

is you send out a letter and say, well, we need more—so you buy 

time with your letters that may or may not be really in the approval process. 

Dr. THROCKMORTON. And we shouldn’t be using those letters to 

do that. Those letters should be—— 

Mr. MEADOWS. So when did you stop? 

Dr. THROCKMORTON. Those letters should be—— 

Mr. MEADOWS. When did you stop? Because I’ve got copies of 

them, if you’d like to see them. 

Dr. THROCKMORTON. I’d be happy to look at them. 

Mr. MEADOWS. When did you stop? 

Dr. THROCKMORTON. What we should be using those letters for 

is to signal true deficiencies in applications. 

Mr. MEADOWS. Mr. Chairman, I just want one answer, and I’ll 

yield back. 

When did you stop using those letters as normal practice. 

Dr. THROCKMORTON. Since 2012, we have put in place a process—— 

Mr. MEADOWS. Okay. I’ve got letters. I’ve got letters that have 

been since then. I’ll yield back. 

Chairman CHAFFETZ. Okay. We’ll now recognize the gentlewoman from Michigan, Mrs. Lawrence, for 5 minutes. 

Mrs. LAWRENCE. Thank you. 

I have a question for you, Ms. Bresch, and thank you for being 

here. I understand the profitmaking of companies, but under your 

realm, the EpiPen has become Mylan’s first billion-dollar drug. Is 

that correct? 

Ms. BRESCH. Yes. 

Mrs. LAWRENCE. In 2014, your company generated 1.19 billion in 

sales only in their specialty drug section because your company 

makes a lot more. Is that correct? 

Ms. BRESCH. Yes. 


KING-6430 with DISTILLER
54 

Mrs. LAWRENCE. And according to your SEC filing, and this is a 

quote, as a result of favorable pricing and increased revenue, in 

2015, your company generated $1.2 billion in sales revenue, driven 

largely by the continued strong performance of the EpiPen AutoInjector. 

According to a press release you issued in February of this year, 

your earnings per share also went up in 2015 by 21 percent. This 

increase was, and I quote, ‘‘at the high end of our previously communicated guidance range.’’ Is that correct? 

Ms. BRESCH. Yes. 

Mrs. LAWRENCE. Your company is continuing to make incredible 

profits this year. Is that correct? 

Ms. BRESCH. Yes. Our company is strong, and we believe that’s 

the best way to serve our patients. 

Mrs. LAWRENCE. Recently, while discussing the EpiPen’s massive 

price increase, you actually said, and I quote, ‘‘No one’s more frustrated than I am.’’ And so is it true that you’re frustrated that you 

didn’t raise it higher, creating a billion-dollar drug was a goal you 

acquired with the EpiPen, and you’re frustrated you didn’t raise it 

more? 

Ms. BRESCH. No. What I am frustrated in is that because the system is so opaque, and people—it’s hard, it’s complicated. I was trying to share today that you don’t typically have that transparency 

of what the company actually receives and what that wholesale acquisition cost is. So that was the frustration. 

Mrs. LAWRENCE. So on September 15 you sent a letter to the 

committee stating that your sales revenue from over 2,700 products 

is 11 billion this year and your profit from the EpiPen would generate 1.9 billion in net sales. So your company expects to make 9 

percent of its revenue this year just off of one of your products. Is 

that correct? 

Ms. BRESCH. Yes. EpiPen is less than 10 percent of our overall 

revenue. 

Mrs. LAWRENCE. But one product can generate 9 percent of your 

revenue, that one product? 

Ms. BRESCH. Yes. 

Mrs. LAWRENCE. So this is the frustration. Not that you don’t 

have a product, not that you don’t have your free product, but 

where is the company in responding to this outcry that I have received and every Member of Congress? What do you plan to do 

with that? Do you hear the cry from the constituents? 

And while you and your company and I’m sure the employees 

enjoy this profitmaking, where is the sensitivity and where is the 

company in saying, I hear this, we have made a tremendous 

amount of money? 

Is it normal for one product, out of 2,700 drugs, one product is 

almost 10 percent? And you have increased that. And while if I’m 

sitting there at the boardroom, I would say, this is great. You’re 

doing a great thing. You’re bringing money in. We’re making 

money. Where are you and the company in saying what do we do 

about the outcry of the people on this situation? 

Ms. BRESCH. And we did listen and take immediate action to put 

a generic in at half the price, and that’s truly an unprecedented acVerDate Nov 24 2008 09:42 Apr 12, 2017 Jkt 000000 PO 00000 Frm 00058 Fmt 6633 Sfmt 6633 H:\24914.TXT APRIL

KING-6430 with DISTILLER
55 

tion for a brand to do that. So we did listen, and we believe that 

we took unprecedented action in getting the generic on the market. 

Mrs. LAWRENCE. You control that generic, and you’re actually 

making a higher profit range off of that generic, correct? 

Ms. BRESCH. No, we’re not making a higher profit off the generic. 

Mrs. LAWRENCE. If you raised the—— 

Chairman CHAFFETZ. I think the gentlewoman’s time has expired. 

Mrs. LAWRENCE. I yield back. 

Chairman CHAFFETZ. Members are advised that there is now a 

vote on the floor. It is anticipated votes will go between an hour 

and an hour-and-a-half. It’s my intention to recognize Mr. 

Mulvaney of South Carolina for his 5 minutes and then go into recess. We will reconvene no sooner than 6:30, but it might be later 

until we get done with the vote series. 

We’ll now recognize Mr. Mulvaney for 5 minutes. 

Mr. MULVANEY. I thank the chairman, and I may not take all 5 

minutes. 

I’ve got to tell you, as someone who considers himself to be a free 

market Republican, a part of me has been uncomfortable with 

where some of this hearing has gone. I wish we were talking, instead of what we’ve been talking about, about why Mylan can 

charge $600 for this or $300 for a generic or whatever, because I 

think that would be a really good discussion, about why this same 

exact product costs between $100 and $150 in Europe. 

The same exact thing, from the same exact manufacturer, costs 

100 to 150 bucks in Europe. In fact, I think you can get it over the 

counter in Europe for $75. One of the reasons, by the way, is 

there’s nine different people making this stuff in Europe because 

it’s easier to get drugs approved in Europe, Dr. Throckmorton, than 

it is here. 

I’ve heard you talk today about this new 10-month plan, and you 

keep telling us, and it’s sort of, well, we have a 10-month plan that 

starts October 1, which makes you wonder how long did it really 

take before this became a big national deal. 

My guess is it takes a long time or to get this stuff approved. 

And one of the reasons they can charge $300 or $600 is because 

it’s too hard to get new products approved in this country. My understanding is that an EpiPen competitor would be even more difficult to get stuff approved because it’s both a drug and a delivery 

device. 

By the way, for those of you, and this hasn’t come up, the stuff 

doesn’t cost anything. This is one of the oldest chemicals that we 

use. I think the stuff is more than 100 years old, and on the Internet it says it costs between, like, 10 cents and 95 cents a vial for 

the stuff. It’s a completely generic—it’s adrenaline. It’s really easy 

to make the stuff and really easy to get the stuff. But for some reason in this country there’s really only one provider. 

So if you can really charge $600 for it and people will pay for it, 

why aren’t more people rushing in to make the stuff so that they 

can get a piece of this huge market? Because it’s too hard to get 

the darn stuff approved, and that’s what I wish we were talking 

about. 


KING-6430 with DISTILLER
56 

Ms. Bresch, I wish we could talk about what you talked about 

in your CNBC article, about how crazy the pricing is, because it is 

bizarre, and we buy stuff in the healthcare market in ways that we 

don’t buy anywhere else. 

The reason that this same product is more expensive every single 

year, with everything else in this room gets less expensive every 

year, is because it’s in the healthcare market, which doesn’t function properly, and we could have talked about that and how hard 

it is to figure out how much stuff costs and the five and six people 

that touch it between the time it comes out of your product and 

gets in the hands of the customer. We didn’t talk about that. 

Instead we talked about your profit margins with people who 

have no clue what that means. We talked about distribution facilities. We talked about cost of goods sold. We talk about board meetings. We talk about your salary. We talk about a bunch of stuff 

that tries to make a lot of us look really good. Somebody in my own 

party said that there’s no way you could really earn $18 million a 

year. That bothers me, okay, and I’m not comfortable with that. 

But at the same time, Ms. Bresch, and I’ve had this conversation 

with other people who have sat in that same chair, you get what 

you deserve. Not because you’re a bad person, not because you’re 

charging too much or too little for a drug. Nobody here has any 

clue as to whether or not you are charging too much or too little. 

We don’t like it. We know that. But we don’t understand the costs, 

we don’t understand the distribution system, we don’t understand 

how healthcare products get priced and sold and distributed. 

I tell you what he we do know, though, is that you’ve been in 

these hallways to ask us to make people buy your stuff. In fact, I 

think there’s laws in 11 States now that require schools to have epinephrine in some immediately deliverable fashion. You’ve lobbied 

us to make the taxpayer buy your stuff. 

At the Federal level, we passed the law here. We did it. By the 

way, I was here when we did it. Everybody was here when we did 

it. We did it 2013. It went by voice vote, one of those magical 

things that happens when we’re not on the floor. 

The White House called it the EpiPen bill, and it gave this wonderful financial incentive to all of our schools to have this product 

in the schools. My guess is that didn’t happen by magic. It may 

have happened because your mother works for the State School 

Boards Association, whatever the group is, it may happen because 

your dad is a U.S. Senator. But you came and you asked the government to get in your business. So here we are to today. 

And I was as uncomfortable with some of these questions as you 

were, I’m certain, sitting over there. But I have to defend both my 

Republican and Democratic colleagues because you’ve asked for it. 

So I guess this is my message. If you want to come into Washington, if you want to come into the State capitols and lobby us to 

make us buy your stuff, this is what you get. You get a level of 

scrutiny and a level of treatment that would ordinarily curl my 

hair, but you asked for it. 

I wish it weren’t like that. I wish you could go off and make your 

stuff, and I wish the market functioned, and I wish you didn’t get 

government involved, but that’s not the world we live in. 


KING-6430 with DISTILLER
57 

And since it is, I have to defend every single question that was 

asked of you today, and I wish I had questions of my own, and I 

do, but I’ve only got 5 seconds left, so I’m not going to get a chance 

to ask them. 

Thank you, Mr. Chairman. 

Chairman CHAFFETZ. The gentleman’s time has expired. 

The committee will stand in recess and reconvene no earlier than 

6:30. 

[recess.] 

Chairman CHAFFETZ. The committee will come to order. We’re 

now back after votes, and we’ll go ahead and recognize Mr. 

DeSaulnier for 5 minutes. 

Mr. DESAULNIER. Thank you, Mr. Chairman. 

Thank you both for being here. 

Ms. Bresch, you talked about your outreach in State legislatures. 

Did you spend any money or your company on lobbying or helping 

with that process? 

Ms. BRESCH. Yes. 

Mr. DESAULNIER. Do you remember how much? 

Ms. BRESCH. I don’t remember exact number, but I would say 

minimal in the scope of what we’ve spent on awareness and access. 

But that outreach and lobbying was for the epinephrine. 

Mr. DESAULNIER. Uh-huh. 

Ms. BRESCH. To be able to have it in the school’s name and not 

a child’s name—— 

Mr. DESAULNIER. When those, when that product has reached its 

life expectancy, do the schools purchase it from you to replace it? 

Ms. BRESCH. We give it every year free. 

Mr. DESAULNIER. Every year for free. 

Ms. BRESCH. Yes. 

Mr. DESAULNIER. All right. 

Your quote in terms of your accepting some responsibility, and 

I read here, is, ‘‘Looking back, I wish we had better anticipated the 

magnitude and the acceleration of the rising financial issues for a 

growing minority of patients. We never intended this.’’ 

Is that pretty much your statement in terms of your responsibility? Other than that, are you proud of the actions of your corporation? 

Ms. BRESCH. Look, I am absolutely—I don’t—I would hope that 

nobody would want to go back in a period of time to where the 

awareness was so shockingly low and the access was almost nonexistent for EpiPens. I believe that we have continued to balance 

that access. It does come at a price, and we’ve tried to balance that 

price and access while at the same time continuing to have access 

in more places. Like I said, I hope the other 65,000 schools, that 

we can get free EpiPens to them. 

I’m also proud of the hearing and understanding this growing 

minority of patients and the uninsured or people facing that high 

out of pocket, that we took immediate action to put the generic out 

there, which is unprecedented, as well as some of the actions from 

the tripling the copay card or raising the eligibility of the patient 

assistance. 


KING-6430 with DISTILLER
58 

Mr. DESAULNIER. Okay. I appreciate that. So I’m going to read 

a couple of quotes from a Los Angeles Times story, August 25, and 

this is quotes. 

‘‘Mylan, the profiteering, tax-dodging’’—this is the Los Angeles 

Times—‘‘drug company currently taking immense heat for jacking 

up the price of EpiPen by 500 percent, announced Thursday that 

it will help more patients cover their soaring out-of-pocket costs for 

their allergy drug device. That’s good for some individuals,’’ the LA 

Time continues, ‘‘patients, and families, but at the heart, it’s a cynical move that actually protects the company’s profits and harms 

the healthcare system.’’ 

As I explained before, the author continues, ‘‘That’s because such 

moves are often marketing schemes dressed up to look like altruism,’’ and then he goes on to explain. 

Are you familiar with this article in the LA Times? 

Ms. BRESCH. No. 

Mr. DESAULNIER. Okay. No one ever showed you this? 

He goes on to say, ‘‘What Mylan is doing is expanding its patientassistance program by providing eligible patients with a savings 

card worth up to $500 per prescription and doubling eligibility to 

households earning up to 400 percent of Federal poverty level,’’ or 

$97,000. ‘‘Many of them, therefore, would pay nothing out of pocket 

for the device. 

‘‘The truth is, however, that these programs are detested by insurers, healthcare economists, and government agencies—with 

good reason. In fact, they’re illegal when applied to Medicare and 

Medicaid patients because they may violate Federal anti-kickback 

laws, which bar payments made to induce patients to choose particular services. Insurers and government programs will have to 

cover everything beyond the copay at a price that can be as much 

as $600’’ a pack. 

So you’re not familiar with any of this, either the article or what 

he’s ascribing to your motives? 

Ms. BRESCH. Which is why we went the step of putting a generic 

in the marketplace, so that we could make sure we touched every 

patient and tried to make sure every access point was covered. So 

by putting the generic in and dropping the wholesale cost to 300, 

we believe went certainly beyond, and again, to reach and provide 

access to as many patients as we can. 

Mr. DESAULNIER. Okay. In this article, he quotes a healthcare 

economist from Emory University, David Howard, and he talks 

about what you’re doing as programs that are ‘‘a triple boom for 

manufacturers. ’They increase demand, allow companies to charge 

a higher price, and provide public relations benefits.’ The manufacturers’ costs look high in absolute terms, but the payoff is even 

greater. ’Manufacturers can afford to pay a lot of $25 of $50 copayments.’′′ 

So again, the answer to this is the generic? Is it changing the dynamics? 

Ms. BRESCH. Completely. 

Mr. DESAULNIER. How long did you have the previous practice 

before you changed to the generic? 

Ms. BRESCH. We still have the patient assistant program and the 

copays for the brand, but by introducing the generic, we hope that 


KING-6430 with DISTILLER
59 

it’s—you know, we hope there’s 85–88 percent generic utilization of 

the generic. 

Mr. DESAULNIER. How long did you have the profits under the 

old system before you switched to the generic? It sounds like you 

did it for altruistic purposes. This article would portray it a different way. 

Ms. BRESCH. Well, and, Congressman, at least the parts that you 

were reading, I think, go to the patient assistant program or the 

copay as what they were giving their description of versus the generic. They didn’t speak about the generic. 

Mr. DESAULNIER. Yeah, but my point is that you’re making it 

sound like you introduced the generic for purely altruistic purposes. The way he describes it was it was a business practice that 

took advantage of the situation for some period of time. 

Ms. BRESCH. Putting the generic in is, like I said, an unprecedented move so that we could reach as many patients as—— 

Mr. DESAULNIER. That’s not the question. I believe in redemption, so I’ll give you the generic, but prior to that, you were making 

money off the situation the LA Times described. So my question is, 

how long did you do that? 

Ms. BRESCH. I don’t agree with the LA Times’ description of the 

programs or our process, and I don’t think they spoke about the generic program that we’ve now announced. 

Like I said, we have invested, and with the point of wanting to 

reach more patients, if we’re now reaching almost 3 million patients, that’s 2 million more that are protected and hopefully much 

better—in a much better position if an anaphylactic event occurs, 

aside from the school program, again, because so many people have 

allergic events that had never had a known allergy, so—— 

Mr. DESAULNIER. My time has gone by, but I’d just say, from this 

article and other articles, I didn’t bother to quote the USA Today 

article or the Market Watch article, that you had a business practice that was immensely profitable, you’ve admitted to that, and 

you have changed it. But it seems as if you’ve changed it in anticipation of what the public has responded to. 

So with that, I’ll yield back the balance of my time. 

Chairman CHAFFETZ. Thank you. 

I’ll now recognize the gentleman from Georgia, Mr. Hice, for 5 

minutes. 

Mr. HICE. Thank you very much. 

I think, Ms. Bresch, you’ve had a lot of questions today and a lot 

of pressure put on you. I appreciate you coming. I’m personally 

very hesitant to go down the path of government getting involved 

in what individuals make and can’t make. This is a free enterprise 

system. And I get very worried when we start going down that 

tree. My concern is where the bottleneck is occurring. 

And, Dr. Throckmorton, I’d like to ask you, an abbreviated new 

drug application, as I understand it, is an application when companies want to manufacturer a generic drug, that’s what they must 

utilize. Is that correct? 

Dr. THROCKMORTON. For a true generic. 

Mr. HICE. Sure. 

Dr. THROCKMORTON. So an authorized generic like we’ve been 

talking about up to now, that’s not approved under that—— 


KING-6430 with DISTILLER
60 

Mr. HICE. Okay. But a true generic. 

Do you know how many abbreviated new drug applications are 

currently pending with the FDA? 

Dr. THROCKMORTON. We have 1,700 responses that we’ve sent 

back to sponsors requesting additional information. We’re waiting 

for that information to come back. There are other applications 

that are in-house that we’re reviewing, again, on the timeline that 

we’ve discussed earlier. 

Mr. HICE. It’s my understanding that the generic applications 

submitted to the FDA are outpacing those applications that are approved three to one. Is that correct? 

Dr. THROCKMORTON. I can’t verify that number. There are 2,300 

applications before the agency and this year—— 

Mr. HICE. Twenty-four hundred? 

Dr. THROCKMORTON. Twenty-three hundred. 

Mr. HICE. Okay. 

Dr. THROCKMORTON. This year we’ve approved 600 products 

through the middle of this year. 

Mr. HICE. Okay. Could you verify for me, could you get the numbers back to us, what the number of applications submitted versus 

those that are being approved? 

And, next, can you tell me the median approval time for generic 

drugs right now? 

Dr. THROCKMORTON. I don’t have that information before me. It’s 

also changing. So in the period before GDUFA I, before we got the 

User Fee Act, those times were—— 

Mr. HICE. I’m talking about now. I would like that information 

as well. 

Dr. THROCKMORTON. I’d offer to get you the trend, if I could. I 

think that would probably be more useful. 

Mr. HICE. Okay. Because the generic pharmaceutical association 

says it’s taking 47 months. It’s taking 4 years. 

Dr. THROCKMORTON. Yeah, that’s simply a misunderstanding. 

And I’d be happy to—— 

Mr. HICE. What do you mean that’s misunderstanding? 

Dr. THROCKMORTON. Forty-seven months is from the beginning of 

GDUFA I, from the beginning of User Fee Act. So any products 

that are being approved now that have been—— 

Mr. HICE. All right. From beginning of the process to the end of 

the process, are you disputing that it takes 4 years? 

Dr. THROCKMORTON. I’m disputing that for products that come in 

today, it will not make 47 months. 

Mr. HICE. Well, I mean, you can make all sorts of promises. I’m 

talking about realistically, for those who have been trying, have 

they been trying for 4 years from the time they start till the time 

they finish? 

Dr. THROCKMORTON. There are products that come in and are 

sometimes insufficient to get approval. Sometimes that’s because 

the data that they’ve submitted aren’t appropriate. 

Mr. HICE. Okay. All right. I don’t want to run around the bush. 

I’m trying to find out how long does it take from beginning to end, 

and from those that have been involved in the process, they’re telling us it takes 4 years. 


KING-6430 with DISTILLER
61 

Now, since 2012, the generic manufacturers, of course, they’ve 

been paying fees to the tune of billions of dollars to try to speed 

the process up through the Generic Drug User Fee Agreement. And 

this past July, as I understand, the FDA actually said that they 

had acted on more than 90 percent of the generic applications. I assume that’s a little bit of what you’re referring to now. 

Dr. THROCKMORTON. That’s the backlog, the applications that 

have been submitted to us. 

Mr. HICE. The backlog is 90 percent? 

Dr. THROCKMORTON. Prior to the beginning of GDUFA I, there 

was a total of around 4,600 applications that we needed to review. 

We’ve acted on more than 90 percent of those. In fact, there are 

fewer than 100 of them that have not gotten a response. 

Mr. HICE. All right. So are you saying of the 4,600, there’s only 

100 left, that 4,500 have been approved? 

Dr. THROCKMORTON. Less than 100 of them remain to have a response. Again, some of the—those products that have a full dossier, 

have given us the data that we need, have been approved or given 

tentative approval. Products that are not sufficient, that haven’t 

met the data needs for us, I don’t think you’d want us to rubber 

stamp those. 

Mr. HICE. No, I don’t want to rubber stamp, but the process is 

bottlenecked. That is the frustration. The free enterprise system 

works when you’ve got multiple companies out there offering products and options for people. We have a scenario now that EpiPen 

basically, you’ve got 94 percent of the market, whatever, and you’re 

the only major player. 

And reason for is because you guys are not processing a host of 

others who are trying to get in the market, and when it’s taking 

3, 4, 5 years for that to occur and who knows how many millions 

of dollars to go through the process, I mean, no wonder the whole 

system is not working. 

Dr. THROCKMORTON. I’d like to show you the trend data. That is 

not the trend that we’re seeing for the cohort that are being—the 

applications—— 

Mr. HICE. The European counterpart only has 24 generic drugs 

awaiting approval, and they do it from beginning to end in less 

than a year. That is not what we’re experiencing here. 

Dr. THROCKMORTON. The European system is quite different from 

ours. 

Mr. HICE. Well, it must be because it’s not taking nearly as long 

as ours does. 

Dr. THROCKMORTON. I would say they are apples and oranges to 

try to compare honestly. 

Mr. HICE. Well, Mr. Chairman, my time has expired, and I yield 

back. 

But, yes, we’ve got tremendous concerns with a drug going from 

$100 to $600, and there’s issues that you all have got to deal with. 

But we can’t place all the blame on you. FDA has got to get their 

act together and start working the process and getting this thing 

going through. 

And I look forward to receiving the information that you said you 

would send. 

Mr. HICE. Thank you, Mr. Chairman. 


KING-6430 with DISTILLER
62 

Chairman CHAFFETZ. Thank you, Mr. Hice. 

We’ll now recognize the gentleman from Vermont, Mr. Welch, for 

5 minutes. 

Mr. WELCH. A couple of preliminary matters. First of all, Mr. 

Chairman and Mr. Ranking Member, thank you for having this 

hearing. And I thought your opening statements set the right tone: 

What is it in the market that’s broken that is causing these prices 

to be increased? 

Also, Mr. Hice is asking about whether there is something we 

can do at the FDA in the approval process. I’m all in if there are 

things we can do that won’t compromise safety. 

Second, full disclosure. Mylan has an excellent production facility 

in St. Albans, Vermont. Many Vermonters work there. I’m very 

proud of it. Good wages and it’s a good employer. 

And then third, what drug companies do, I totally agree, is vitally important. You know, my first wife had cancer 9 years, and 

medications extended her life and alleviated her suffering. So it’s 

important to get it right. 

But here’s the dilemma, and it’s best summed up by a letter that 

I received—we all got a lot of them—from a person in Essex Junction. 

‘‘My 4-year-old son has a severe peanut allergy, and I’m a single 

mother working a low-wage job with little healthcare coverage. I 

can’t afford to pay this much for EpiPens, and I can’t afford not to, 

because that cost is possibly his life.’’ 

So the heart of the matter here is that moms and dads are being 

given a Hobson’s choice. They can pay more than they can afford 

or they can risk a loss they cannot endure. And that’s why it’s so 

urgent that we work together to get to the bottom of this. 

And I want to focus my questions on some of what I think are 

the market breakdowns for lack of competition. And again, Mr. 

Hice, I acknowledge, the FDA, maybe we’ve got to make some reforms there, but there are some things that are happening. 

When your company bought the EpiPen, the company and got 

the EpiPen, that was in 2007, I think, right? 

Ms. BRESCH. Yes. 

Mr. WELCH. And how many EpiPens were sold then? 

Ms. BRESCH. Much less than today. I think it was—I mean, it 

was certainly less than half of the—— 

Mr. WELCH. Probably way less than half, right? 

I have a question about the basic economics. Usually when you 

sell more of something, the per-unit cost goes down. Is that not the 

case with EpiPen? 

Ms. BRESCH. So, no, cost of goods has gone up every year, and 

our investment has continued—we’ve continued to invest in the 

product. 

Mr. WELCH. All right. So you’re going to give us—you’ll give us 

the figures on that. Because I understand you’re saying it’s 50 

bucks that is the money in your pocket, which sounds like it would 

be reasonable. But as you can tell from a lot of the questions, 

there’s a lot of head scratching going on here about that. 

Ms. BRESCH. I totally appreciate that, and I appreciate there has 

been a lot of misinformation, understandably so, given the complexity as, you know, many of you have pointed out, in the system. 


KING-6430 with DISTILLER
63 

Mr. WELCH. Well, and I’m going to ask you to get your graph out 

that you gave us where the wholesale acquisition price is 608 

bucks, that’s what people are paying. And then you got down to the 

bottom, it’s 50 bucks for the profit per pen. 

Ms. BRESCH. Yes. 

Mr. WELCH. That 50 bucks sounds reasonable. But the rebates 

and allowances, who is getting all that money? 

Ms. BRESCH. So that goes—that is between the other people in 

the supply chain, the pharmacy benefit managers, retail pharmacy, 

wholesalers and insurers. 

Mr. WELCH. Okay. Isn’t the service that a pharmacy benefit manager provides essentially to negotiate a best price with the pharmaceutical companies to get a given drug? And they get a rebate, 

right? 

Ms. BRESCH. Probably be better to have a PBM. 

Mr. WELCH. Well, you work with—— 

Mr. BRESCH. But, philosophically, I think that the pharmacy 

manager, the system, that that is—— 

Mr. WELCH. No, but I’m not talking philosophically. We’re all trying to understand, like, how it works. 

So the PBM buys huge quantities of drug A, B, or C, and then 

they get a discount from Pfizer or from you, and they keep some 

of that, and it’s the way they make their money. 

And part of their way of negotiating is with the so-called formulary, right? So if you have heart disease, there might be an option of drug A, B, or C, and they put on the formulary drug A, and 

there’s increase volume there and they get a rebate, right? 

Ms. BRESCH. Uh-huh. 

Mr. WELCH. With respect to epinephrine, there’s no formulary. If 

you’re having anaphylactic shock, there’s only one thing you need, 

and it’s the product that you sell. 

Ms. BRESCH. No. There has been competition, as we’ve said, 

throughout the years. 

Mr. WELCH. All right, but—— 

Ms. BRESCH. But I think this is kind of—if I only could just get 

this point. Auvi-Q, which launched their product at the end of 

2013. So we did have to face formulary choices of not even being 

on the formulary due to the competition in the marketplace. 

Mr. WELCH. But somehow you’ve ended up with 94 percent or 97 

percent of the market. 

Ms. BRESCH. But I would ask that people recognize our product 

and that it is more complicated. Auvi-Q was completely recalled off 

the market for safety reasons, which is a very rare event. 

Mr. WELCH. No, I understand that. But in this graph, I mean, 

what is just impossible to understand is how does something cost 

$608 when the company that sells it is only making 50 bucks, and 

that is hard to understand. 

Ms. BRESCH. And I understand how complicated and how head 

scratching that is, which is why, you know, I’ve said I would welcome the opportunity to sit down—you know, I know this is about 

EpiPen, but look at the system. 

Mr. WELCH. All right. I don’t have much time, so I have to keep 

going. 


KING-6430 with DISTILLER
64 

You know, this is hammering that Vermonter who has that Hobson’s choice, but it’s also very tough on taxpayers. Our Medicaid 

program in 2011 was paying $111 per script, and we spent in 

Vermont—and this is a lot of money for us—we spent then $111. 

Now it’s $557. We went from $256,000 in taxpayer money to $1.7 

million. That’s tough. I mean, that really is tough. 

Ms. BRESCH. And, look, and that’s why the generic, being able to 

put it into the market, that would help lower healthcare costs 

across the board. 

Mr. WELCH. Right. But the generic—what I understand, it used 

to be the position that you had, Mylan had, is that doing these authorized generics was a real threat to the generic industry. That’s 

the public record of your point of view. 

Ms. BRESCH. A decade ago, and I know that this is complicated, 

but the authorized generics of keeping a first generic or competing 

with the generic, in this instance, that’s not this case, but—— 

Mr. WELCH. If I can just go on a little bit. One other thing. The 

cost of EpiPen in the Netherlands is 105 bucks, and that’s where 

your corporate headquarters are. How do they get 105—and you 

moved your headquarters from the U.S. to the Netherlands—how 

is it they get to buy it for 105 bucks and we pay 608? 

Ms. BRESCH. Sir, one, I’m not sure of the cost, but what I would 

say is they have a completely different system. 

Mr. WELCH. I guess I yield back. 

Chairman CHAFFETZ. We would appreciate some clarification on 

that. 

We do have a pharmacist, and I believe the only pharmacist in 

the House and the Senate, pleased to have him on this committee. 

We’ll now recognize him. Mr. Carter of Georgia. 

Mr. CARTER. Thank you, Mr. Chairman. Mr. Chairman, before I 

start, can I inquire of you, the witnesses took an oath and they’re 

still under oath now? 

Chairman CHAFFETZ. Absolutely. 

Mr. CARTER. Okay. I just want to make sure. 

Ms. Bresch, have you ever seen a child have an anaphylactic 

shock? You ever witness that? 

Ms. BRESCH. I haven’t. 

Mr. CARTER. Excuse me. 

Ms. BRESCH. I have not. 

Mr. CARTER. You have not? 

Ms. BRESCH. No. 

Mr. CARTER. Have you ever gone up to a pharmacy counter and 

carried a pack of two epinephrines and two EpiPens and told a 

mother of a child who has had anaphylactic shock, who has an allergy, that the price of that is going to be $600? 

Ms. BRESCH. No. 

Mr. CARTER. Have you ever seen a mother cry because she can’t 

afford the medication for her child? 

Ms. BRESCH. No. 

Mr. CARTER. Well, the reason I ask you this, Ms. Bresch, is because I have. I’ve experienced it. I’ve seen this. I’ve seen a mother 

go out and have to call family members to see if she can get the 

money together to try and see if she can pay for this medication 

that she knows her child has to have. I’ve witnessed that firsthand. 


KING-6430 with DISTILLER
65 

None of us are without blame here, Ms. Bresch, none of us, and 

I include my profession as well. 

Let me ask you a couple of yes-or-no questions. First of all, the 

608 wholesale acquisition cost, is that AWP. 

Ms. BRESCH. No, sir. 

Mr. CARTER. So it’s just wholesale acquisition? 

Ms. BRESCH. Yes. 

Mr. CARTER. Okay. Wholesale acquisition cost is $608. You said that your company receives approximately $274, is that right, after 

rebates and allowances? 

Ms. BRESCH. Correct. 

Mr. CARTER. Okay. So after you take out the expenses like manufacturing, acquisition cost, packing, regulatory compliance, all of 

those things, your profit is even less than that. Is that correct? 

Ms. BRESCH. Correct. That would be the $50 per pen. 

Mr. CARTER. Okay. So after you do that, Ms. Bresch, do you have 

any contracts with PBMs? Does Mylan have any contracts with any 

pharmacy benefit managers, PBMs? 

Ms. BRESCH. Yes. 

Mr. CARTER. You do have contracts with PBMs? 

Ms. BRESCH. Yes. 

Mr. CARTER. Okay. Can you describe some of those contracts for 

me, very briefly? 

Ms. BRESCH. Well, the contracts are around products, multiple 

products. To participate on the formularies, the patients have access to the products. 

Mr. CARTER. Okay. So we established earlier that over half of the 

list price does not go to Mylan. Do you know how much the PBM 

receives? 

Ms. BRESCH. I don’t have a breakdown between the channels, but 

that’s where showing that between those—— 

Mr. CARTER. I understand, but do you know specifically how 

much the PBM, the pharmacy benefits manager receives? 

Ms. BRESCH. I don’t specifically know the breakdown between 

those four buckets, between the PBMs, the pharmacy, the insurers, 

or the wholesalers. 

Mr. CARTER. Nor do I, and I’m the pharmacist, and I don’t know 

either. In fact, nobody knows. That’s the problem. Nobody knows 

how much of this is going to the pharmacy benefits manager, because there is no transparency. That’s the problem. 

Do you know how much the PBM receives in rebates and other 

fees that are related to the EpiPen whenever one is adjudicated 

through a pharmacy? 

Ms. BRESCH. I don’t. 

Mr. CARTER. You don’t. Nor do I. All I know is that my computer 

calls the insurance and they tell me how much I’m supposed to 

charge a patient. I don’t know how much you’re getting as a manufacturer. I don’t how much the insurance company is getting. I 

don’t know how much the PBM is getting. That’s where transparency comes in. That’s what we need. 

Do you know how much of the EpiPen savings, the related savings and rebates that the PBM gives back to Mylan? You said you 

had contracts with PBMs. How much do you get back from the 

PBM? 


KING-6430 with DISTILLER
66 

Ms. BRESCH. I don’t know. 

Mr. CARTER. All right. Remember you’re under oath. Do you 

know how much you get back in rebates from a PBM? 

Ms. BRESCH. I just don’t want to give you an inaccurate number. 

I agree that we have contracts. 

Mr. CARTER. Do you know? Can you provide us with that information? 

Mr. Chairman, can I ask for that information. 

Chairman CHAFFETZ. Absolutely. 

Ms. BRESCH. I’ll certainly go back and look at that. I’m just saying I don’t want to give an inaccurate number to you. 

Mr. CARTER. Okay. So you don’t know how much the PBM receives or keeps for itself, nor do I, nor does anyone else, whether 

it’s the manufacturer, the insurer, or the pharmacist, none of us 

know. 

What we do know is this. Prescription prices, prescription drug 

prices have soared, and so have the profits of PBMs. They are in 

the billions of dollars. 

Until we have more transparency in the PBM market, we are 

going to continue to see these kind of cost increases. We’re going 

to continue to see them. 

That’s why we need bills like House Resolution 244. My good 

friend, Representative Doug Collins from Georgia, has introduced 

this bill dealing with the MAC transparencies. It’s called the MAC 

Transparency Act. This would help us and take a step towards 

transparency. 

Mr. Chairman, I want to thank you. I want to thank you for 

holding this hearing today. And I want to reiterate my request that 

I have made to you and to this committee from time to time about 

further investigating how deceptive practice by PBMs are impacting drug prices. 

Would you agree with that, Ms. Bresch? 

Ms. BRESCH. I certainly would agree that transparency is needed. 

The healthcare system has evolved dramatically over the last decade, and I’m sure, as you’ve seen as a pharmacist, that the system 

hasn’t kept pace with this evolution of the healthcare system. 

Mr. CARTER. The system isn’t kept pace? PBMs have had billions 

of dollars, billions of dollars in profits, yet I have to sit there and 

take a prescription to the counter to a mother whose child has suffered from anaphylactic shock and watch her cry and watch her 

have to call family members in order to get the money to pay for 

this medication. 

And we don’t know where it’s going. You say it’s not going to you. 

Where is it going? I need to tell her. I need to tell her where that 

money is going. 

Ms. BRESCH. The most immediate thing I could do was put a generic into the market. 

Mr. CARTER. No, don’t go there. You know I know better than 

that. That is wholly—that is just—that is a crock, and you know 

that I know that. It is. There is no difference whatsoever. 

Now, Ms. Bresch, don’t—— 

Ms. BRESCH. We cut the price. 

Mr. CARTER. You cut the price in half. Do not do that to me. 

Don’t try to convince me that you are doing us a favor here. You 


KING-6430 with DISTILLER
67 

are not doing a favor by that. You could have dropped the price of 

EpiPens just as well, but instead you said, no, we’re going to make 

a generic. 

Ms. BRESCH. But to the—— 

Mr. CARTER. Oh, no, no. 

Ms. BRESCH. —to the point of the wholesale acquisition cost of 

getting to those patients and making a difference, to your point, to 

make sure everyone who needs an EpiPen has one, I couldn’t ensure by the wholesale acquisition cost on the branded side of this 

channel that that would get to all the patients. 

Mr. CARTER. You did not want to cut the price on the EpiPen 

brand, whatever you want to call it, because you wouldn’t have gotten your rebates from the PBMs like you get them now. I am waiting for the information that you have promised me that you will 

send to this committee. 

Mr. Chairman, I am going to hold her to that. 

Ms. BRESCH. And, sir, what I can tell you is that to bypass this, 

the most immediate thing that we could do was to put a generic 

in, because it bypassed the formulary, everything you’re just describing. 

Mr. CARTER. Are you getting a rebate on those generics from the 

PBMs? Are you getting a rebate on the generic version of EpiPen 

from the PBMs? 

Ms. BRESCH. I don’t—I don’t—those are still under—we haven’t 

done those arrangements yet because we’re launching—— 

Mr. CARTER. But are you planning on getting a rebate? Are you 

planning on getting a rebate from the PBM for the generic version 

of EpiPen that you are introducing? 

Ms. BRESCH. I don’t know. I honestly don’t know how—— 

Mr. CARTER. Remember the oath, I’ll tell the truth. 

Ms. BRESCH. I have not negotiating those—but I can tell you, as 

you know, the formularies, the PBMs, and the generics, it’s very 

different than on the brand side of the house, the channel. 

Mr. CUMMINGS. Would the gentleman yield? I know that he 

doesn’t have any more time, but I just want to help clarify something. 

Mr. CARTER. I yield. 

Mr. CUMMINGS. And this is to help. I just want to take just one 

step further. 

Do you know what you get from the PBMs for the regular 

EpiPen, how much rebates? The gentleman was talking about that. 

Do you? 

Ms. BRESCH. That’s what I said. I don’t want to give an inaccurate number—- 

Mr. CUMMINGS. But you can get us that information? 

Ms. BRESCH. I absolutely will go back and work on that information. 

Mr. CUMMINGS. Okay. And two, you expect to be getting rebates 

from the generic. Is that right? Yes or no? 

Ms. BRESCH. He asked specifically about the PBM, and I don’t 

want to give an inaccurate answer. 

Mr. CUMMINGS. But I didn’t ask you that. I said are you getting—are you getting—— 


KING-6430 with DISTILLER
68 

Ms. BRESCH. We pay rebates. We pay rebates on the generic as 

well. 

Mr. CARTER. That’s not what he’s talking about. You know what 

he’s talking about. 

Ms. BRESCH. I don’t—I can’t sit here today and tell you what 

comes back on the generic. What I can tell you is that there’s discounts and rebates paid, but it’s a much smaller degree on the generic. 

Mr. CARTER. Mr. Chairman, reclaiming my time. This is a shell 

game. That’s all it is. 

Ms. Bresch, I hope you never have the experience of going to a 

counter and telling the mother of a child who has suffered from 

anaphylactic shock that she needs to pony up with $600. I hope you 

never experience that, Ms. Bresch. 

Mr. Chairman, I yield back. 

Chairman CHAFFETZ. I thank the gentleman. 

Ms. Bresch, when could we expect this committee to have that 

information that was asked by Mr. Carter? What’s reasonable? 

Ms. BRESCH. I mean, I have no—— 

Chairman CHAFFETZ. You’re the CEO. You’ve got how many employees? 

Ms. BRESCH. Yeah, no—yes. Just I’m not sure what’s asking or 

how—I don’t want to promise something—— 

Chairman CHAFFETZ. You don’t know what he’s asking? You 

want him to ask again? 

Ms. BRESCH. No, no, I know what he’s asking about what it takes 

to give you that information, but we will do it as soon as possible. 

Chairman CHAFFETZ. I’m asking you what a reasonable date is. 

A week? Can you get that to us in a week? 

Ms. BRESCH. Ten days? 

Chairman CHAFFETZ. Okay, 10 days. Yes. Ten days. Thank you. 

Appreciate it. 

Let’s now recognize Mrs. Watson Coleman for a generous 5 minutes. 

Mrs. WATSON COLEMAN. Thank you, Mr. Chairman. 

And I’m really sorry I couldn’t be here all day. I may ask you 

some questions that have already been asked. 

So I want to talk about sort of the company and how generous 

it is and what a good life it seems to be associated with being associated with the company. Your perks, in particular, aren’t limited 

to just an astronomical salary and stock benefits. You also have access to the company jet. Is that true? 

Ms. BRESCH. Yes. 

Mrs. WATSON COLEMAN. Mylan’s public filings list the amount of 

money that that you spent on the company’s jet. In 2015, you spent 

310,000, and in 2014, you spent 319,000. Does that sound correct? 

Does that sound correct? 

Ms. BRESCH. I believe that sounds correct. 

Mrs. WATSON COLEMAN. Did you fly here today? 

Ms. BRESCH. Earlier in the week, not today. Yes, I flew, but just 

not today. 

Mrs. WATSON COLEMAN. And did you fly on the private jet? 

Ms. BRESCH. I did. 

Mrs. WATSON COLEMAN. And were you accompanied by anybody? 


KING-6430 with DISTILLER
69 

Ms. BRESCH. Other employees. 

Mrs. WATSON COLEMAN. That’s a yes or you’re asking me? 

Ms. BRESCH. Yes. No, I’m saying other employees accompanied 

me. 

Mrs. WATSON COLEMAN. Okay. Do you have any idea how much 

that costs? 

Ms. BRESCH. Look, I know that—it’s fortunate and it’s for efficiency and safety. And, yes, I understand—— 

Mrs. WATSON COLEMAN. Let me ask you another question. From 

where did you fly? 

Ms. BRESCH. From Pittsburgh. 

Mrs. WATSON COLEMAN. From Pittsburgh. Is that where you’re 

located? 

Ms. BRESCH. Yes. 

Mrs. WATSON COLEMAN. Okay. Yeah, it is a little stunning to see 

that so much money could be spent on your traveling around in a 

jet while we’re having this discussion here about whether or not 

Americans are being bilked for a life-saving drug like EpiPen. 

I know the importance of EpiPen because when I was a legislator 

in the State of New Jersey, we voted legislation to make sure that 

all the schools had it. And so I was sort of very interested in your 

response to Mr. Welch, if this drug use had increased so very 

much, wouldn’t there have been then an associated decrease in the 

cost to people because it was so widely used? That’s just the economies of scale, but apparently that’s not the case. 

I want to talk a little bit about the company and some of its tax 

benefits, because I think I want to participate in the backdrop of 

a picture here. 

We know that you’ve profited from increasing the price of 

EpiPens, but you’ve also—this company has also increased its profits in another way, and that’s by taking advantage of a tax loophole, particularly the tax inversion, which involves a company moving its official headquarters abroad to lower the amount of taxes 

they pay in the United States. 

In 2014, Mylan moved its official headquarters to the Netherlands. Is that true? 

Ms. BRESCH. Yes. 

Mrs. WATSON COLEMAN. You wrote in a letter to shareholders 

about the tax inversion, and I quote: ‘‘The transaction also is expected to lower Mylan’s adjusted tax rate, currently forecasted to 

be approximately 24 to 25 percent in 2014, to approximately 20 to 

21 percent in the first full year after the consummation of the 

transaction and to the high teens thereafter.’’ 

What was Mylan’s companywide effective tax rate in 2014? 

Ms. BRESCH. I believe it was in the mid-20s to low-20s, before we 

inverted. 

Mrs. WATSON COLEMAN. What is it today? 

Ms. BRESCH. It’s between 15 to 17 percent. 

Mrs. WATSON COLEMAN. So, from our perspective, last year, 

hardworking Americans had to pay 25 percent on all amounts that 

they’ve earned over $38,000. But Mylan, which, according to the 

SEC filings, had earnings in 2014 of close to a billion dollars, you 

paid a lower tax rate than many individuals who are struggling 


KING-6430 with DISTILLER
70 

and who are possibly parents who need access to those drugs for 

their children. 

Did you lower the cost of the EpiPen since Mylan would be saving so much in taxes by this move? 

Ms. BRESCH. So the 15 to 17 percent is our global tax rate. I 

mean, that’s after averaging everything out. So we in the United 

States are still paying higher taxes on everything that we sell here 

in the United States. 

Mrs. WATSON COLEMAN. So, from the benefit that you derived 

from moving your headquarters, did you lower the EpiPen cost 

here in this country? 

Ms. BRESCH. We’re still paying taxes—— 

Mrs. WATSON COLEMAN. That’s a yes or a no, ma’am. 

Ms. BRESCH. —higher taxes. 

Mrs. WATSON COLEMAN. So that’s a no or a yes? That would be 

no. 

Ms. BRESCH. We did not lower. 

Mrs. WATSON COLEMAN. Okay. According to an article in the 

Washington Post, as a result of this tax inversion, some Mylan executives based in the U.S. faced higher personal tax liability related to stock that they received as part of their compensation. 

That same article stated that Mylan paid you more than $5 million 

to cover these taxes. 

So, while Mylan skirted its tax liability and left our country, 

leaving hardworking Americans to foot this bill, you didn’t have to 

worry, because Mylan paid more than $5 million to cover your personal taxes. That’s really hard to deal with and hard to believe. 

You are the CEO of Mylan, right? 

Ms. BRESCH. Yes. 

Mrs. WATSON COLEMAN. When Mylan moved its official headquarters abroad, did you move to the Netherlands? 

Ms. BRESCH. No. 

Mrs. WATSON COLEMAN. According to your Web site, and I quote: 

‘‘The chief executive officer and other executive officers of Mylan 

N.V. carry out the day-to-day conduct of Mylan N.V.’s worldwide 

business at the company’s principal offices in Canonsburg, Pennsylvania.’’ Is that true? 

Ms. BRESCH. Yes. 

Mrs. WATSON COLEMAN. So is there anything more than a virtual 

office in the Netherlands so that you could claim to be a tax purposes resident there? 

Ms. BRESCH. We are now domiciled in the Netherlands and handle our—and run our global business, but physically, yes, we work 

out of Canonsburg. 

Mrs. WATSON COLEMAN. So, basically, you’re running the business out of Canonsburg. So you simply moved your address to another country so that you didn’t have to pay at the tax rate in this 

country at the same time you present this drug, this lifesaving 

drug at this increased cost to families who can barely afford it. It 

sounds to me like this is really a sham and a shell, and it’s very 

sad to hear this. 

Do you really think that it’s fair that you don’t have to pay the 

taxes as a U.S. company? 


KING-6430 with DISTILLER
71 

Ms. BRESCH. So, again, we do pay taxes here in the United 

States for all of the sales of all the revenue that we receive here 

in the United States. So we are absolutely paying our taxes for everything that we sell here in the United States. 

Mrs. WATSON COLEMAN. The one thing I get is that you all are 

very smart about avoiding responsibility and straightforwardness, 

you know, but there is a bill that could close the loophole that you 

have your virtual office over in the Netherlands and claim to be a 

resident for tax purposes, and that is the Stop Corporate Inversions 

Act of 2015, which was introduced in January of last year. 

And I’m sorry to say that my Republican colleagues have failed 

to act on it, but I think that, having had a hearing of this nature, 

we can expect, I think, to have more attention to this matter. 

And, with that, I thank you for the generosity of time, Mr. Chairman, and I yield back. 

Chairman CHAFFETZ. Thank you. 

We’ll now recognize the gentlewoman from New Mexico, Ms. 

Lujan Grisham. 

Ms. LUJAN GRISHAM. Thank you, Mr. Chairman. 

And I too want to thank the ranking member and the chairman 

for bringing this hearing together and having you. 

Unfortunately, it’s not our first hearing on such matters. I mean, 

we are talking and dealing with Turing and Valeant and Mylan 

and Gilead, and seeing a really disturbing pattern where Congress 

provides a variety of mechanisms to invest in innovation and pharmaceutical companies so that we get the right public health treatments and medicines and that we also have innovations. And we 

give you patent protections. We give you R&D money. And what we 

get in return is now a monopoly using your generic aspect in a way 

that we did not intend and have a hearing where we’re not going 

to get any relief. You’ve made it clear that you’re following the 

rules, you’re completely justified, and the amount of money that 

you are both spending on salaries and bonuses and infrastructure 

and acquisitions is all justified while you’re making a billion dollars 

on a drug that most people can’t afford, with a patient assistance 

program that most drug companies created in the 1990s so that as 

drug prices went up, policymakers would hesitate before dealing 

with price legislation that would make it fair to consumers. Because the problem is, if you’re a consumer and you have to have 

it because it’s lifesaving, it’s already unfair, because we’re going to 

have to do whatever we need. 

And, quite frankly, my constituents aren’t so happy about a prescription drug assistance program. Nobody wants to give you their 

tax returns or their Social Security number or tell you over the 

phone what their income is or provide you those income statements. And I don’t know what you pay for those staff to provide 

those—to do that evaluation. The reality is: Just don’t do it. Make 

the drugs affordable. And you create an environment where you 

have preferences and you make sure that it’s on a preventative 

drug list. So I think, instead of having any more conversations— 

I mean, I don’t think that we’ve gotten very many of our questions 

answered, because, in fact, Mr. Chairman, it is true it is very complicated. We’ve created an environment where they don’t have to 

be transparent, so they aren’t. 


KING-6430 with DISTILLER
72 

Let me give you an example where what we thought, what we 

intended in terms of policymaking with generics and competition 

worked. In 10 years, when we decided that, as a public health 

issue, we should have, to your point, have defibrillators in all public places, because we want to save people’s lives. We know that vehicle creates an opportunity where laypersons can help administer 

that level of care and prevent a person from dying from a heart attack. And in 10 years, by having six companies effectively compete, 

we’ve dropped those prices of defibrillators by about two-thirds. 

Unfortunately, that’s an anomaly. Today, we are seeing price increases in therapeutic equivalents, in generics. We’re seeing longer 

patent protections. We negotiated longer patent protections in 21st 

Century Cures. So I would suggest that, today, while we have bipartisan now support and real interest in protecting our consumers, that maybe it’s time that this committee lead the effort. 

Let’s join up with Ways and Means, and Energy and Commerce, 

and here’s some ideas: I think it’s time to consider allowing FDA 

to look at price increases and then ask them to include that when 

they prioritize generic applications. 

I propose that maybe we need a price protection program for 

public health drugs, and that we need to decide a public formulary. 

There’s no formulary for the EpiPen. You’ve got it. A formulary 

works when there’s competition. There are different drugs on that 

formulary for high blood pressure or insulin. You don’t need a formulary; you’re it. And you’re it, except that, in Canada and all over 

Europe, your drug is much cheaper. So I think we should import 

those drugs right back. 

We paid you to figure out the device, the application, the drug. 

Now we’re protecting you with a generic. We’re allowing you to do 

patient assistance programs under the guise of trying to make sure 

that it’s affordable. We create rebates and very complicated. You 

pay them; they pay you back. I say: Let’s demystify it. Let’s make 

sure that Congress puts in a real patient protection program to 

prevent companies like yours from taking advantage of every policy 

aspect that was intended to make affordable health care. 

And, quite frankly, as long as I’m on this rant, I’m tired of paying prescription drug companies and drug manufacturers and device companies to treak these issues. If we put the same kind of 

money that we’re allowing you to keep to deal with curing allergies, 

we wouldn’t be having this conversation about EpiPen, would we? 

So I say we shift it, instead of trying to, you know, pull out information where I agree; I think you’ve been far less than transparent. And I think we ought to do transparency legislation. I 

think there’s a whole host of ideas where we could lead instead of 

being dragged down this path where we’re upset for our constituents when none of these prices on their own at these company’s 

hands will shift. They certainly haven’t. 

Pharmaceutical companies and insurance companies and PBMs 

where you tried to shift to PBMs, they are all making incredible 

profits in an environment where that profit-making environment 

has all been at the hands of policymakers trying to create a competitive, innovative, private sector, high-quality investment to protect Americans. 


KING-6430 with DISTILLER
73 

And, instead, we’ve created that access around the world, and 

we’ve left Americans holding, if you will, the financial bag. And I 

for one am tired of that. So I don’t need any answers because I 

won’t get any that are fair from you or your company, but I am expecting Congress now to take a much different leadership role. 

And I thank my colleagues on this committee and the leadership 

by the ranking member and the chairman, because maybe, because 

of your greed and the other companies, maybe you finally put Congress into a position where, bipartisan, we will have the courage 

to finally do what’s right for our constituents. I have that courage. 

I believe my colleagues do too. 

I yield back. 

Chairman CHAFFETZ. I thank the gentlewoman. 

We’ll now recognize the gentleman from Wisconsin, Mr. 

Grothman. 

Mr. GROTHMAN. I’m out of breath. I just got here. 

Okay. First of all, for you, Mr. Throckmorton, and maybe somebody’s asked this question. If they’ve asked it, just say, ‘‘Go to the 

next question.’’ 

Have we figured out why the market is not working and why 

other companies are not marketing these things and undercutting 

Mylan? 

Dr. THROCKMORTON. There is another product that’s being marketed. Why it’s not marketed more broadly, why these increases in 

prices I think is the question you are asking. Isn’t it? 

Mr. GROTHMAN. Right, right. Is the other product at a lower cost? 

Dr. THROCKMORTON. I’m told that that product is lower price, 

yes. 

Mr. GROTHMAN. Okay. Maybe we don’t want Ms. Bresch to pitch 

the competition. But you do have competition. You’ve only got 94 

or 96 percent of the market, right? 

Ms. BRESCH. That’s our current market share, but there’s been 

products in and out of this marketplace over the years. And as—— 

Mr. GROTHMAN. Are there products in the marketplace today? 

Ms. BRESCH. Pardon me? 

Mr. GROTHMAN. Are there products in the marketplace today? 

Ms. BRESCH. Yes, yes. 

Mr. GROTHMAN. And are they lower priced than your product? 

Ms. BRESCH. There’s an Adrenaclick authorized generic, and I’m 

not sure of its exact price, but I believe it’s in the $450 range. 

Mr. GROTHMAN. Okay. Is there anywhere—I’ll ask Mr. 

Throckmorton, because I don’t mean to ask you to pitch your competition. Is there any reason why there—there are generics available—why people aren’t producing this stuff for substantially less? 

Dr. THROCKMORTON. There are no generics in the way that I 

think you are speaking of them. The generics that are available are 

so-called authorized generics, which are branded name products 

that have chosen to remove their name from their label. Otherwise, 

they are—— 

Mr. GROTHMAN. So that’s not what this is. 

Dr. THROCKMORTON. Our interest, I would say the broader interest that we have is in encouraging real competition, which means 

multiple manufacturers creating many different versions of epiVerDate Nov 24 2008 09:42 Apr 12, 2017 Jkt 000000 PO 00000 Frm 00077 Fmt 6633 Sfmt 6633 H:\24914.TXT APRIL

KING-6430 with DISTILLER
74 

nephrine auto-injectors, including true generics, generics approved 

under the Abbreviated New Drug Application. 

Mr. GROTHMAN. So so-called competition for EpiPen, you would 

really argue, is not as good or is not the same thing? 

Dr. THROCKMORTON. If you were looking just simply at the numbers of manufacturers in the area, there are two manufacturers 

currently making epinephrine auto-injectors for prescription in the 

U.S. There’s a third product that’s approved that was voluntarily 

withdrawn last fall because of some manufacturing issues. If they 

address those manufacturing issues, they would be able to come 

back onto the market also. 

Mr. GROTHMAN. And do you expect them to, given, I presume, 

there’s a high markup here? 

Dr. THROCKMORTON. We are offering any assistance that we can 

to them to do exactly that. 

Mr. GROTHMAN. Now, my next question for Ms. Bresch, kind of 

a more difficult question, and I’m not suggesting any governmental 

problem, but I read a book a little while ago by Charles Murray. 

I don’t know if you’re familiar with him, a famous author. He 

talked about the moral decline of America. And a lot of that moral 

decline, he focused on what I’ll call the underclass and a lifestyle 

is not something that many people in my age group had when we 

were growing up, but he focused a little bit on the upper class. And 

one of the things he focused on, which I think maybe collectively 

isn’t a huge amount of money—maybe it adds, you know, a penny 

to each prescription drug you have, but I think it’s bad for the fabric of society. Now, I realize it’s legal, and I’m not just targeting 

you, because it’s common across the board. 

It came up earlier that, you know, you’re making whatever, $19 

million or $20 million a year. And that’s fine. Maybe that’s a half 

cent off of every prescription you guys make. But the point Murray 

made is there was a time in this country where chief executives got 

along making a lot less. And they apparently make a lot less in sizable companies around the globe. And I think the point he made 

was this is a sign of greed. And while, you know, it may be a relatively small amount for every person in the country, it probably 

tears a little bit at the moral fabric as people who work for companies and make relatively small amounts of money look at the chief 

executive making more money than anybody could possibly imagine. 

Do you ever feel guilty or have pangs of guilt making such a 

large sum of money, not as somebody who founded the company 

but as an employee who really doesn’t have a lot of risk yourself? 

Ms. BRESCH. Look, I am blessed and fortunate. I’ve been working 

at this company for 25 years and representing 40,000 employees. 

So what—Mylan has continued to provide access to multiple medications here in the U.S., over 600 products. 

Mr. GROTHMAN. I know, and I’m sure there are many employees 

who work for you who do wonderful things, valuable scientists who 

are saving people’s lives. I’m just saying, as you walk around the 

cubicles and see all the people making $40,000 or $50,000 or 

$60,000 a year, do you ever feel guilty that you and the board of 

directors and such have arranged to have you make $20 million a 

year? 


KING-6430 with DISTILLER
75 

Ms. BRESCH. I am—I love that Mylan is trying to make a difference every day in what we do and how much product and how 

much access we are bringing and the savings to this country alone, 

which, over the last decade, have been $180 billion. 

Mr. GROTHMAN. Probably more the scientists who work for you 

than you. But you understand what I’m saying? Maybe you don’t 

understand. And maybe you are very good and maybe you’re worth 

it. I think one of the things that frustrates a lot of Americans is 

there are a lot of people who even run their companies into the 

ground and make tens of millions of dollars. 

But I’m just going to ask you to comment again. Do you think 

it’s good for the moral fabric of society and the idea of we want people to believe in the free economy system when, in a business, some 

people make $20 million a year? 

Ms. BRESCH. I think to your point, the free market system and 

delivering—being a well-run company and delivering great shareholder value is part of that free market system. 

Mr. GROTHMAN. I’m sure they’re getting good value. You see 

what I’m saying? Maybe you don’t understand what I’m saying. 

There are a lot of people out there—we’re going into election season 

here. There are a lot of people out there who think the system is, 

in part, broke, and in part, it’s broke because they’re working their 

butt off and doing very valuable things, and maybe they’re even 

told to take cuts in pay, and they see a chief executive making a 

huge amount of money, way more proportionately, even adjusting 

for inflation, than chief executives made 50 years ago and, as I understand it, more than they make in other Western countries. And 

I think it grates at some people. I think it causes distrust in our 

system. 

I’m not suggesting we take away your freedom to make that 

amount of money. I’m just saying, in all walks of life, there are people that have the capability of making more and voluntarily say, 

‘‘I don’t need that amount of money.’’ And I just wondered if you 

had any comments on the system that we have in America where 

so many chief executives, not just you, seem to be making far more 

money than I think anybody would even know what to do with. 

And that’s my only question. 

Ms. BRESCH. And I—other than commenting that, yeah, the free 

market system and—is—I hope that there are companies that are 

definitely giving back, giving back and creating access and providing—providing many things. And, like I said, I go back to Mylan 

and what we have been able to create and with 80 billion doses capacity and building up to lower those healthcare costs. So—— 

Mr. GROTHMAN. I’ll take it you’re not answering the question because a little bit deep inside, you are embarrassed at what you’re 

making. 

Chairman CHAFFETZ. Thank you. 

I will now recognize myself for 5 minutes. 

Your last comment about reducing the price I find offensive and 

inaccurate, but let me go first. Is EpiPen, is it a brand drug, or is 

it a generic drug? 

Ms. BRESCH. EpiPen is a brand drug. 

Chairman CHAFFETZ. Does that mean it’s an innovator drug? 


KING-6430 with DISTILLER
76 

Ms. BRESCH. You mean based on CMS classification. It’s a noninnovator drug. 

Chairman CHAFFETZ. Wait, wait, wait. Noninnovator drugs are 

really generics, correct? 

Ms. BRESCH. The definition, CMS has a statutory definition for 

innovator and noninnovator drugs. 

Chairman CHAFFETZ. So you think it’s a branded product, but it’s 

a noninnovator drug for the purpose of CMS? 

Ms. BRESCH. Yes, that’s how it’s classified. 

Chairman CHAFFETZ. And you’re familiar that Mylan had to settle a $118 million settlement with the Department of Justice back 

in 2009, right? Yes? 

Ms. BRESCH. I’m not familiar. I’m trying to—what settlement? 

Chairman CHAFFETZ. With the Department of Justice to resolve 

allegations that Mylan had underpaid the rebate obligations in the 

Medicaid prescription drug rebate program with respect to several 

other Mylan products, not EpiPen. But you’re familiar with that? 

Ms. BRESCH. I’m not recalling the settlement that you are speaking of. 

Chairman CHAFFETZ. This is the Justice Department. I’ll ask 

unanimous consent to enter this into the record, dated Monday, October 19, 2009, Justice News, ‘‘Four Pharmaceutical Companies 

Pay $124 Million for Submissions of False Claims to Medicaid.’’ 

Without objection, so ordered. 

Chairman CHAFFETZ. Have you or anybody at Mylan spoken with 

CMS? 

Ms. BRESCH. Yes, there has been conversations with CMS. 

Chairman CHAFFETZ. Have you had any of those conversations 

with CMS about EpiPen or the generic EpiPen? 

Ms. BRESCH. I have not. 

Chairman CHAFFETZ. Have you spoken with anybody at Health 

and Human Services about EpiPen? 

Ms. BRESCH. I have not. 

Chairman CHAFFETZ. Nobody? 

Ms. BRESCH. No. 

Chairman CHAFFETZ. Has anybody at your company been in negotiations or discussions with CMS regarding EpiPen? 

Ms. BRESCH. Yes. People at the company have talked. Staff has 

talked back and forth. 

Chairman CHAFFETZ. Who at your company has done that? 

Ms. BRESCH. I think there’s been several people, I mean, several 

people within the company that have had conversations. 

Chairman CHAFFETZ. Can you get us the names of those people? 

Ms. BRESCH. I’m sure we could tell you—yes, I’m sure we—— 

Chairman CHAFFETZ. Within that 10 days? 

Ms. BRESCH. I’m sure that we can do that. 

Chairman CHAFFETZ. We would also like the names of the people 

at CMS they’ve been in discussions with. Can you give us the 

names of the CMS people that your staff has been working with? 

Ms. BRESCH. I’m sure we can. Like I said, I’ve not had any of—— 

Chairman CHAFFETZ. Is 10 days reasonable? 

Ms. BRESCH. Sure. 


KING-6430 with DISTILLER
77 

Chairman CHAFFETZ. Because the concern here is that and the 

question really is, why is Mylan classifying EpiPen as a noninnovator drug? 

Ms. BRESCH. When we acquired the product, it had been designated as a noninnovator drug. And there’s been several points 

throughout time that have confirmed that status. 

Chairman CHAFFETZ. Do you believe that the generic that you 

are planning to introduce—when, by the way, do you hope to introduce the generic? 

Ms. BRESCH. Certainly before the end of the year. Over the 

next—— 

Chairman CHAFFETZ. In the next 90 days or something? 

Ms. BRESCH. Couple of months, yes. 

Chairman CHAFFETZ. Okay. And are you going to work to classify 

that as a noninnovator drug or an innovator drug? 

Ms. BRESCH. I’m not sure what that classification—we haven’t 

submitted that document. We haven’t submitted yet, because we 

haven’t launched the product. 

Chairman CHAFFETZ. Okay. I need to spend a few minutes going 

through this, this chart that’s right next to you. And I also need 

the help with you—and it’s going to take a few minutes; I appreciate the indulgence of the committee—to understand some of the 

definitions. Mr. Carter pointed out there’s a revenue line here that 

seems to be missing, correct? Let me go first to the Mylan revenue, 

274. Define that for me. Is that the average revenue per—what is 

that? 274, define that. 

Ms. BRESCH. The average revenue that Mylan receives for a 2– 

Pak of EpiPens. 

Chairman CHAFFETZ. So, in your letter to me and Mr. Cummings 

of September 15, page 2, at the very top of the paragraph—I’ll read 

here—you write: ‘‘Approximately 85 percent of consumers who are 

prescribed an EpiPen auto-injector pay less than $200 for a twounit pack and a majority pay less than $50.’’ 

Is that accurate? 

Ms. BRESCH. I actually thought it was lower than the 200. I actually thought the majority of patients pay less than 100, and then 

many pay less than 50. 

Chairman CHAFFETZ. Well, they’re both in the majority, right? 

Eighty-five percent of consumers who are prescribed an EpiPen 

auto-injector pay less than $100 for a two-unit pack and a majority 

pay less than $50. 

Ms. BRESCH. Yes. 

Chairman CHAFFETZ. So, of those that purchase the EpiPen, how 

many do it as a prescription? Do you have to have a prescription? 

Ms. BRESCH. Yes, you have to have a prescription. 

Chairman CHAFFETZ. So 100 percent of that universe? 

Ms. BRESCH. Yes. 

Chairman CHAFFETZ. So, if your average revenue to Mylan, your 

Mylan revenue is $274 and the majority of people are paying less 

than $50, the minority is paying what to get it? 

Ms. BRESCH. Well, it could range from—it could be anything, because all the plans—if you’re uninsured or if you’re—it would 

range, because every plan is different. 

Chairman CHAFFETZ. So what’s the highest number? Is 608 low? 


KING-6430 with DISTILLER
78 

Ms. BRESCH. It could—because we don’t set the price that’s—that 

when the patient walks up to the pharmacy counter—— 

Chairman CHAFFETZ. I’m talking about your revenue. 

Ms. BRESCH. Our revenue is the 274 per pen, on average. 

Chairman CHAFFETZ. Okay. So that’s the average number. 

Ms. BRESCH. Right. 

Chairman CHAFFETZ. And you just told me that the majority pay 

less than 50 bucks. So I’m trying to figure out with the remainder, 

what are they paying? 

Ms. BRESCH. But the cost to the patient is different than what 

we’re receiving. 

Chairman CHAFFETZ. Yes. 

Ms. BRESCH. And I think that—and when—— 

Chairman CHAFFETZ. But you just told me—look, you told me 

that you sell 4 million 2–Paks, right? Eight million individual, 4 

million 2–Paks. 

Ms. BRESCH. Correct. 

Chairman CHAFFETZ. If you multiply 4 million 2–Paks times the $274, you miraculously get to roughly $1.1 billion. 

Ms. BRESCH. Correct. 

Chairman CHAFFETZ. So how is it that the majority, according to what you wrote us, pay less than $50 if the majority of 4 million 

people, just more than 2 million people, are paying less than 50 

bucks, how do you get to an average of $274? 

Ms. BRESCH. Because the patient—what the patient is paying is 

not—is not coming back to Mylan. And when we were speaking 

earlier of the people, the middlemen in the system, so that’s either 

the pharmacy benefit managers, retailers, wholesalers, insurers, is 

where—because I’m not—I’m not interfacing directly, from a price 

perspective or a pay perspective, to the patient. 

Chairman CHAFFETZ. But you are representing to us that 85 percent of consumers are paying less than 100 bucks and that a majority are paying less than $50. The reason you’re having this hearing 

is not because the public thinks they’re getting a good deal. Look, 

I got a $600 product, and I only had to pay $48. That’s not why 

you’re here. They’re telling us they are having to pay much greater 

numbers. 

Ms. BRESCH. And it’s that growing minority that I spoke of earlier that is being faced now with the wholesale acquisition cost or 

more at the counter. 

Chairman CHAFFETZ. How do you define ‘‘profit’’? What is profit 

to you? 

Ms. BRESCH. So the $50-per-pen profit is for the direct EpiPenrelated cost. We didn’t—there’s no company allocation or anything 

like that off of that. 

Chairman CHAFFETZ. Well, but that’s not what you wrote me. 

You wrote this letter less than a week ago. Here’s what you said: 

‘‘Among other things, this profit is used to fund research and development and to maintain and improve our facilities across Mylan, 

in which we invest $1.2 billion this year alone or more than $3 million every day.’’ That’s not the definition of profit. 

Ms. BRESCH. No. I think what we were saying in there is that’s 

how we reinvest the profit that we make. But I thought you were 

asking me how the $50—— 


KING-6430 with DISTILLER
79 

Chairman CHAFFETZ. When there are five executives over 5 years that take out $300 million, where in your P&L does that show up? 

Does it show up in your profit line? Does it show up in EBITDA? 

Where does it show up? 

Ms. BRESCH. Well, it’s not coming out of—the $50 number I’m 

showing you per pen is taking no company allocation to that whatsoever. 

Chairman CHAFFETZ. But that’s what you just wrote to me. You 

said, ‘‘This profit is used for our’’—we’re supposed to believe that 

your $50 profit is funding R&D and facilities and all that, because 

that’s exactly—I just read to you verbatim what you wrote to me. 

Ms. BRESCH. And we absolutely take our profits and reinvest in 

our business. I mean, to your point, we’re—this year alone, 750 

million in R&D we’re spending across bringing hundreds of products to the market. 

Chairman CHAFFETZ. When you take the $300 million that the 

five executives got, where on your P&L does that show up? 

Ms. BRESCH. And I’m saying it’s not—we didn’t take any of that out of this $50. When we’re showing you this $50 profit—— 

Chairman CHAFFETZ. I’m not talking about the $50, the whole 

thing. Come on, you amortized your fixed expenses and your operating expenses over everything, correct? 

Ms. BRESCH. Correct. But—— 

Chairman CHAFFETZ. Where does that show up in that spreadsheet? Tell me where that number is. 

Ms. BRESCH. It’s not. It’s not on here. $50 would be lower if we 

were taking those company allocations, like running the business, 

out of this. This is straight just EpiPen. 

Chairman CHAFFETZ. I’ve gone way past. I’m going to come back 

to this, because your numbers are so askew. It just—it really is 

troublesome. 

Let me recognize the ranking member, Mr. Cummings. 

Mr. CUMMINGS. Thank you very much. You know, when Mr. 

Shkreli appeared before us, he took the Fifth. And to be frank with 

you, you might as well have taken the Fifth too, with the kind of 

information that we’ve gotten here today, because I don’t think 

that we—I tell you: This reminds me of a game when it’s like hiding the ball. And it’s like a shell game, and we can’t—you know, 

you seem—it seems like we can never figure out where the ball is. 

And as I said from the very beginning, I was concerned that we 

would be here in a rope-a-dope situation. It’s worse. It is worse. In 

the rope-a-dope situation, the boxer sort of holds on and tries to get 

through, and then, at the end, he comes back and he wins. 

In this situation, not only are you holding on and trying to win, 

but in the end, you are placing us in a position where we’re not 

making very much progress here at all. I’m saying I’ve listened 

to—I’ve been here 99 percent of this hearing, and I’ve practiced law 

for many years, and I’ll tell you: I don’t know what your lawyers 

are telling you, but I don’t think that you have been frank with us. 

And I could understand it a little bit better if you didn’t know what 

this hearing was all about. And I don’t say those words lightly. 

Let me ask you a few questions to see if we might be able to 

move forward here a little bit. You know, your numbers just don’t 

add up. And I think that’s what’s happened. I mean, if I could sum 


KING-6430 with DISTILLER
80 

up this hearing, it would be ‘‘the numbers don’t add up.’’ And it is 

extremely difficult to believe that you are making only $50 in profit 

when you just increased the price by more than $100 per pen. 

Do you have any internal company documents that track the 

total profits you have made off of EpiPen from 2007, when you acquired it, until today? Do you have any of those documents? 

Ms. BRESCH. Well, we certainly could—I, sitting here today, don’t 

have the cumulative number, but I totally understand and had— 

I know if I had only read everything that’s been out there around 

the price, I can totally understand how perplexing it is and the system. And I would hope that, while I don’t have answers how to fix 

all of it, I think that I couldn’t agree more: the transparency of the 

608 down is needed across the board, because patients have no visibility, pharmacists—nobody’s got a visibility of the value or 

where—what’s being paid for what. And I think—— 

Mr. CUMMINGS. Can we hold on for that one little thing you just 

said? You talk about the value of the medication, right? You know, 

you can take that—I mean, when you talk about the value of a 

medication, I guess you’re saying, well, if you have a certain medication, it will keep you out of the hospital. A certain medication 

will save your life. I mean, where does that end? In other words, 

how do you put value on life? Are you following what I’m saying? 

I could go on and on and on. So is that the measurement? 

Ms. BRESCH. No. That’s why I was saying—— 

Mr. CUMMINGS. I mean, but you’ve said it 50 million times in 

this hearing. And it sounds like you’re saying: ‘‘Because I’m able 

to save somebody from possibly going to the hospital or whatever, 

that’s supposed to be incorporated into the value, and that’s partly 

why we are able to charge these prices.’’ And are you telling us 

that you are doing us a favor, that you’re doing our constituents 

a favor by raising these prices? 

Ms. BRESCH. I think hopefully what you’ll see with the generic 

coming to the market is a—— 

Mr. CUMMINGS. I’m talking about right now. Right now. Right 

now. I’ve got—the other night I was at a PTA meeting in my district, and I had a mother who has three children, and all of them 

use EpiPen. She has to have one set at home, and she has one at 

the school. And she stood there in tears, because she’s only making 

maybe $50,000 a year or less, and she’s trying to figure out how 

she’s going to afford this. 

And as I listen to you more and more and you talk about—I 

think I wouldn’t be so—I think I might be a little bit more trustful 

if I hadn’t heard some of this before, if I hadn’t read some of it before from people like Shkreli, who called us imbeciles. 

But now—but when you present to me that you’ve got these assistance programs, as I see the assistance programs—and by the 

way, everybody comes in with the same story. There must be some 

playbook that you all use. And they say: ‘‘Oh, we’ve got an assistance program. We’re going to help some people.’’ And the next 

thing you know they then use that to justify not bringing the prices 

down. 

Do you understand that? 

Ms. BRESCH. I do. And I—— 


KING-6430 with DISTILLER
81 

Mr. CUMMINGS. And that’s exactly what you’ve come in here to 

do—you’ve done. You’ve done it. That’s what you’re doing. Are you 

going to go down on the price? Are you going to come back down 

on the price at all? Put aside the generic stuff. What about coming 

down on the price? 

Ms. BRESCH. We believe that the generic was much more meaningful to make sure we’re reaching those patients, so that—across 

all the access points. And one thing I would say—and I know 

you’ve had other companies in here, and I know orphan drugs. 

There has been conversations across this. I would say, just as an 

example, Mylan’s had an orphan drug product called Cystagon on 

the market for years, years and years. And at—it treats a very 

small number of patients, cystinosis, less than—I believe it’s now 

500. It’s a very, very rare disorder. And that price has stayed 

around $1,200 to $2,000 annually to provide the medicine needed 

every day, where a company came on the market 3 years ago at 

$300,000 to treat that same patient population with just a more 

convenient dose. 

So I understand that there are the things that you’ve seen and 

companies that you’ve spoken to, but I would hope that you would 

be able to look at Mylan and the role that we’ve played with 

generics, the role that I play if I talk about our Cystagon experience, or trying to make sure that the access point for people who 

are both carrying it but in schools and in other public places, so 

that there is an EpiPen there or an epinephrine auto-injector there 

for anyone who needs it whenever—— 

Mr. CUMMINGS. You know, we appreciate all of that, but do you 

all, does Mylan have a slogan of ‘‘Seeing is Believing’’? 

Ms. BRESCH. Yes. 

Mr. CUMMINGS. You do? 

Ms. BRESCH. Yes. 

Mr. CUMMINGS. ‘‘Seeing is Believing.’’ That’s what we want to do. 

We want to see the records. We want to see the records. You are 

refusing to say how much profit your company makes. You are repeating industry talking points with no substance whatsoever. You 

are trying to claim that your massive price increases are actually 

a good thing for American families. Our committee requested documents from Mylan, but so far, you failed to produce everything 

we’ve asked for. As you just said, Mylan’s slogan is ‘‘Seeing is Believing.’’ 

So, in summary, Ms. Bresch, will you agree today—I know the 

chairman has asked you to produce some documents within the 

next 10 days and some information in the next 10 days. Will you 

agree today to produce all the documents the committee has requested so we can confirm what’s going on here? 

Ms. BRESCH. We will certainly produce everything that we can. 

Mr. CUMMINGS. What does that mean? I don’t know what that 

means. We’ve given you—we’ve asked for specific documents. 

Ms. BRESCH. And I know we’ve been responsive, and I know that 

we’re still—I mean, this has been real time. I understand that 

we’ve produced thousands of documents, a couple thousand documents. And I know that there’s more—there’s more that we have 

to produce. And I’m saying that I’m sure we will produce everyVerDate Nov 24 2008 09:42 Apr 12, 2017 Jkt 000000 PO 00000 Frm 00085 Fmt 6633 Sfmt 6633 H:\24914.TXT APRIL

KING-6430 with DISTILLER
82 

thing that we possibly can to give you the visibility and the transparency to the numbers that I’m showing you here today. 

Mr. CUMMINGS. And so that we will be clear, we want your 

agreements and your contracts with manufacturers and suppliers, 

distributors, PBMs, and any of your other partners in the distribution channel for EpiPen. 

Will you produce those? 

Ms. BRESCH. I can’t speak to all of those contracts, from the confidentiality agreements in some of those, the competitive information in some of those. But that’s why I’ve got to rely on the lawyers 

who are producing these documents to make sure we’re staying 

compliant with some of the other provisions in the contracts. 

Mr. CUMMINGS. So you will get us what you got. I know you’re 

all lawyered up back there, but you’re going to make sure that you 

consult with your lawyers to get us what you can? 

Ms. BRESCH. Yes. 

Mr. CUMMINGS. All right. Thank you. 

Chairman CHAFFETZ. I now recognize the gentleman from Georgia, Mr. Carter. 

Mr. CARTER. Thank you, Mr. Chairman. 

I’ll be very brief. I find the chart very interesting. Can you hold 

it up a little more? I can’t see the very bottom of it. Okay. So we’ve 

got wholesale acquisition costs at $608, rebates and allowances. 

This is what you give back to patients. And so that’s minus $334? 

Ms. BRESCH. No, no. This rebates and allowances are all the 

things that you were speaking of, the PBM, retail. That’s all the 

rebates and things that flow to all the—— 

Mr. CARTER. So you’re giving a rebate to a PBM? 

Ms. BRESCH. Yes. 

Mr. CARTER. You’re giving a rebate to a PBM? 

Ms. BRESCH. Yes. 

Mr. CARTER. That’s where that comes in there. 

Ms. BRESCH. It’s part of it. 

Mr. CARTER. It’s part of it. 

Ms. BRESCH. It’s in there. 

Mr. CARTER. Okay. So you’re giving a—what are allowances? 

Ms. BRESCH. That’s—so all of the fees, there’s wholesaler fees, 

discounts, rebates. That’s just capturing everything that’s between 

the 608 and the 274, which is what Mylan receives. 

Mr. CARTER. Okay. Are you getting any rebates from PBMs? 

Ms. BRESCH. And that’s what I said I didn’t want to give you an 

inaccurate number. There’s—— 

Mr. CARTER. Okay. I understand that, but that was not my question. I didn’t ask you for a number. I said, are you getting rebates 

from a PBM? 

Ms. BRESCH. And across our business? 

Mr. CARTER. Yes or no, are you getting rebates from a PBM? 

Ms. BRESCH. But for EpiPen, we are paying rebates to the PBM. 

Mr. CARTER. Are you getting rebates from a PBM? 

Ms. BRESCH. I don’t—we’re not getting EpiPen-specific rebates 

from an EpiPen from being the manufacturer. 

Mr. CARTER. So you are not getting—— 

Ms. BRESCH. I don’t believe—— 

Mr. CARTER. —rebates from a PBM? 


KING-6430 with DISTILLER
83 

Ms. BRESCH. I don’t believe so on—like, for instance, if we’re just 

talking about EpiPen. 

Mr. CARTER. You just told me earlier you were going to produce 

documents that would give us your numbers. 

Ms. BRESCH. But—so we—what I don’t want to confuse is we’re 

a manufacturer. We’re also an employer. So we have a PBM that 

is managing, say, all of employees in the U.S. So what I didn’t 

want to give you is an inaccurate number. If there was rebates that 

come from the PBM as an employer versus the manufacturing, 

we’re paying the rebates for the products. 

Mr. CARTER. This is amazing. This is amazing. I have never in 

my life seen such a shell game. I’m speechless, and that doesn’t 

happen very often. 

Ms. BRESCH. And that’s why we have said and encouraged, to 

your point, that transparency and where that’s flowing and how it 

works, so that you do know what the cost is. 

Mr. CARTER. Okay. Let me ask one more question, and then I’ll 

stop. Can you hold it up again? 

Ms. BRESCH. Sure. 

Mr. CARTER. You took an oath earlier today saying you would tell 

the truth. 

Ms. BRESCH. Yes. 

Mr. CARTER. Is that the truth, $50 per pen? 

Ms. BRESCH. Yes. 

Mr. CARTER. That is the truth? 

Ms. BRESCH. Our profit is approximately $50 per pen. 

Mr. CARTER. Mr. Chairman, I yield. 

Chairman CHAFFETZ. Thank you. 

Just a few questions as we wrap up. On that chart again, I 

would like to see a definition of ‘‘rebates and allowances.’’ I’d like 

to see a definition for each of those numbers. For instance, cost of 

goods sold, what do you include and not include in that number? 

Ms. BRESCH. That’s everything that we’re paying to our partner 

for the cost of goods sold. 

Chairman CHAFFETZ. So that’s it? What else is in the cost of 

goods sold? 

Ms. BRESCH. Because we are—we have a partner on the product. 

Chairman CHAFFETZ. Yes. 

Ms. BRESCH. So we pay a price to—— 

Chairman CHAFFETZ. Do you buy it as a finished product? 

Ms. BRESCH. Yes. 

Chairman CHAFFETZ. So you don’t manufacture it? 

Ms. BRESCH. No. We’re partnered on the product. 

Chairman CHAFFETZ. And so you pay them $69 per—— 

Ms. BRESCH. Per 2–Pak. 

Chairman CHAFFETZ. Per 2–Pak. 

Ms. BRESCH. For two EpiPens. 

Chairman CHAFFETZ. For two EpiPens. So that’s your turnkey 

price? 

Ms. BRESCH. Yes. 

Chairman CHAFFETZ. When you call ‘‘direct EpiPen auto-injector costs’’ of $105, what is in that number? 

Ms. BRESCH. So sales, marketing, the disease awareness. So everything that would be directed to EpiPen or around anaphylaxis 


KING-6430 with DISTILLER
84 

awareness. All the access programs. So that would be all-inclusive 

of everything directly related to EpiPen. 

Chairman CHAFFETZ. And the number for research and development, your fixed costs, your variable costs at your company, where 

does that number show up? 

Ms. BRESCH. So that’s not on here. These are just direct EpiPenrelated costs. So, I mean, if you look at our—the entire company, 

obviously, that was the point I was trying to just say earlier, that 

this doesn’t—this is looking at a product on a standalone basis 

versus saying it takes a company or human resources or other entities to sell the product. So this doesn’t take any of that into consideration. This is just giving you an approximate profit on just from 

an EpiPen-related perspective. 

Chairman CHAFFETZ. And not to pick so much on your own personal compensation, none of that comes out of this number, these 

numbers? You want us to believe that your profit is less than $50? 

Ms. BRESCH. If you took company allocation and all that in, yes. 

Chairman CHAFFETZ. I don’t know who the investors of this company are, but, man, I’m telling you: this is some fishy business, because these things do not add up. We would expect a very professional presentation on your P&L, and these dumbed-down versions 

here do not make sense without the definitions in here. It just feels 

like you’re not being candid and honest with Congress, who is asking you for some very basic information. 

Ms. BRESCH. And we—— 

Chairman CHAFFETZ. And your attorneys are over there scrambling. They’re all uncomfortable. But you know what? We just want 

some basic information. You dug this hole for yourself. You guys 

dug this hole for yourself. We asked for some simple basic information. Don’t tell me that you’re pulling all your R&D costs and all 

of your fixed expenses and all your facilities and all of that out of 

your profit line. 

Any responsible P&L, it would lay this out for us. You can make 

this thing go away by being honest and candid, and we just don’t 

think you are. That’s why we’re on I don’t know what number hour 

here and we’re asking you to provide more information. 

And don’t come here and tell us that, you know, you’re doing the 

world a favor by increasing the price from $125 to over $600 and 

everybody else is making money but poor old Mylan. It just doesn’t 

smell right. It doesn’t pass the basic sniff test. 

Ms. BRESCH. And, Chairman, I don’t think we said we weren’t 

making money. I think all we were trying to set the record straight 

as to the dollar amounts that have been out there around the 608 

price to show that what we actually receive is the 274 and to walk 

down that. And we will happily provide the definitions and that 

transparency to show you the $50. 

Chairman CHAFFETZ. And I just don’t buy the idea that the majority of consumers are paying less than 50 bucks. I mean, that’s 

what you’re telling us. 

Ms. BRESCH. Right. And that’s what—— 

Chairman CHAFFETZ. Trust but verify. Seeing is believing, the 

Mylan way. Show it to us. Show it to us. 

Ms. BRESCH. And that is what our data shows, and we will. 


KING-6430 with DISTILLER
85 

Chairman CHAFFETZ. I know. Well, we haven’t seen it. So I appreciate you providing that to us. 

I have two quick FDA questions here. 

Dr. Throckmorton, how many Abbreviated New Drug Applications are pending before the FDA right now? 

Dr. THROCKMORTON. 2,300 actions are currently before us. 

Chairman CHAFFETZ. And how long is the average wait time for 

an approval of a generic drug? 

Dr. THROCKMORTON. I’d like to get that information and get it 

back to you as soon as I can. 

Chairman CHAFFETZ. Can you define what—in fairness, what I 

asked Ms. Bresch, what’s a reasonable time before we start raising 

the red flag here? 

Dr. THROCKMORTON. Can I—— 

Chairman CHAFFETZ. Ten days, is that—— 

Dr. THROCKMORTON. Ten days sounds like a common number, if 

that would be good enough for you. 

Chairman CHAFFETZ. We would appreciate that. 

Mr. Cummings. 

Mr. CUMMINGS. Just briefly. Ms. Bresch, you mentioned that 

you’ve got some confidentiality agreements. That doesn’t apply to 

us, Congress, you know that, right? Hello. 

Ms. BRESCH. No, I didn’t know that if there’s confidentiality—— 

Mr. CUMMINGS. Now you know. That doesn’t apply to us. And I’m 

sure your attorneys will work that through. 

I just hope that—I just want to go back and briefly as I close 

with what I said before. I’ve asked you every kind of way, would 

the prices come down? And you’ve basically made it clear—basically, you fall in the same category of Shkreli and the Valeant people. They come to the hearing, they go through the motions. At 

least you tried to answer some questions. 

But in the end, our constituents still suffer. And I hope that, 

when you fly back on your jet, you’ll think about that mother that 

I told you about or the people that Mr. Carter talked about a few 

minutes ago trying to just take care of their families. And, you 

know, I don’t—I try to really look at things from a very—in a way, 

a very balanced way. But I can tell you that I’ve been on this committee for 20 years, and very rarely have I seen a situation where 

it seems that we could not get the answers that we were looking 

for to this degree. 

And what that does is it goes against credibility, and that’s a 

very, very difficult hurdle. And so that’s why we really do need to 

see the documents. And what we’re trying to do—you know, you 

can make all the money you want. I just don’t like the idea of it 

being done in a way that’s not transparent, and I don’t like it being 

done on the backs of people who can least afford it. 

And you keep trying to convince us that Mylan is doing a great 

favor, but Mylan’s making money. Mylan’s doing fine. But to come 

in and to say some of the things that you’ve said, it just makes me, 

you know, feel that maybe you don’t think we’re that bright, and 

that’s a sad commentary. 

So thank you very much, and we’ll look forward to receiving your 

answers and documents. 


KING-6430 with DISTILLER
86 

Chairman CHAFFETZ. Yes, we’ll be following up with both of you 

within 10 days. 

The committee stands adjourned. 

[Whereupon, at 8:28 p.m., the committee was adjourned.] 


KING-6430 with DISTILLER
(87) 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD


KING-6430 with DISTILLER
88 


KING-6430 with DISTILLERInsert offset folio 14 here 24914.014

McDermott 

Will Emery 

Boston Srussels Chicago Dalla$ 00$00ildorf Frankfurt Houston london Los Angales Miami 

Mi!atl M!Jnieh NewYorl< Or~eCounty Paris Roms Seoul smconVa!ley Washington,O.C 

Stra!egu:. a!tiance with MWE China Law Offices (Shanghai) 

October 4, 2016 

The Honorable Jason Chaffetz 

Chairman 

Committee on Oversight and 

Government Reform 

Attn: Sarah Vance 

2157 Rayburn House Office Building 

Washington, DC 20515-6155 

The Honorable Elijah E. Cummings 

Ranking Member , 

Committee on Oversight and 

Government Reforn1 

Attn: Alexandra Golden 

2471 Rayburn House Office Building 

Washington, DC 20515-6155 

Dear Chairn1an Chaffetz and Ranking Member Cummings: 

OCT 0 42016 

Stephen M. Ryan 

Attorney at Law 

sryan@mwe.com 

+1 202 756 S-333 

I am responding today on behalf of my client, My ian, to additional requests for infom1ation that 

you directed to the company at the hearing conducted by the Committee on Oversight and 

Government Reform on September 21, 2016. Enclosed is a disk containing the following 

documents: 

I. An Excel spreadsheet containing a Managed Care Rebate Report Summary report 

from Mylan at MYLAN-HOGRC-002393. This is responsive to Requests 5, 6, 9 and 15 in your 

September 30,2016, letter. 

2. A Form 8-K filed by the company with the SEC on September 26, 2016 and 

enclosed here at MYLAN-HOGRC-0002387 through MYLAN-HOGRC-0002392. This is 

responsive to Request 3 in your September 30,2016, letter. Please note that the Bates range in 

this letter supersedes the range in my letter last night. 

U,S. ptact!ce conducted through McDermott Will & Emery llP. 

500 North Capitol Street, N.W. Washington DC 20001·1531 Telephone: +1 202 756 8000 Facsimile: +1 202756 8087 www.mwe.com 
89 


KING-6430 with DISTILLERInsert offset folio 15 here 24914.015

3. Copies of product supply and services agreements with Meridian Medical 

Technologies, a subsidiary ofPtizer Inc. Copies are enclosed here at MYLAN-HOGRC0002067 through MYLAN-HOGRC-0002386. This is responsive, in part, to Request 6 in your 

September 30,2016, letter. 

Much of the information contained in this submission is highly proprietary and business 

sensitive, and is labeled as such. I respectfully would request that Members and staff treat such 

information as confidential, and not publicly disclose it. To the extent the Committee does 

intend to disclose such confidential information, I would request that the Committee notify the 

company in advance so that appropriate communications and business measures may be put in 

place to protect the company's business. 

If you have any questions regarding this submission, please do not hesitate to contact me or my 

partner T. Reed Stephens at McDermott Will & Emery at 202-756-8129. 

Sincerely, 

2 
90 


KING-6430 with DISTILLERInsert offset folio 16 here 24914.016

September 20, 2016 

The Honorable Jason Chaffetz 

Chairman 

Committee on Oversight and 

Government Reform 

U.S. House of Representatives 

2157 Rayburn House Office Building 

Washington, D.C. 20515 

The Honorable Elijah Cummings 

Ranking Member · 

Committee on Oversight and 

Government Reform 

U.S. House of Representatives 

2471 Rayburn House Office Building 

Washington, D.C. 20515 

Dear Chairman Chaffetz and Ranking Member Cummings: 

As your committee prepares to hold a hearing on the EpiPen price increases, the 

Healthcare Leadership Council (HLC) appreciates the opportunity to share our thoughts 

on the important topic of healthcare pricing. 

HLC is a coalition of chief executives from all disciplines within American healthcare. It 

is the exclusive forum for the nation's health care leaders to jointly develop policies, 

plans, and programs to achieve their vision of a 21st century health system that makes 

affordable, high-quality care accessible to all Americans. Members of HLC-hospitals, 

academic health centers, health plans, pharmaceutical companies, medical device 

manufacturers, biotech firms, health product distributors, pharmacies, post-acute care 

providers, and information technology companies-believe that the issue of healthcare 

costs needs to be addressed. As leaders from the full spectrum of American 

healthcare, we have long maintained that affordability and accessibility must be health 

system priorities. We also believe that, for the good of patients and consumers, 

affordability and innovation can, and must, co-exist. 

Earlier this year, through our National Dialogue for Healthcare Innovation (NDHI) 

initiative, HLC publicly released a set of proposed actions to reduce costs while 

maintaining, and even improving, access to high-quality care. They include: 

• Improving care coordination and patient engagement and adherence 

• Accelerating data interoperability 

• Modernizing existing statues to accommodate the movement toward value-based 

care 

• Commonsense Food and Drug Administration (FDA) reforms that will speed 

therapies to consumers and strengthen competition in the marketplace 

More information on these ideas and examples on how they can result in reduced costs 

and improved care can be found in NDHI's report on VIable Solutions: Six Steps to 

Transform Healthcare Now. These proposals, if adopted, will help to ensure improved 
91 


KING-6430 with DISTILLERInsert offset folio 17 here 24914.017

access to therapies in the long-term, as opposed to price controls or excessive 

regulations that will slow the development of needed cures for devastating illnesses. 

Price controls may affect costs in the short-term but could reduce access over time to 

current and new cures. 

As your committee investigates the EpiPen price increases, we hope that you will keep 

HLC's thoughts in mind. We look forward to continuing to work with you in support of a 

healthcare system that is affordable, accessible, and innovative. 

MaryGrealy 

President 
92 


KING-6430 with DISTILLERInsert offset folio 18 here 24914.018

POLlCY & ACTION FROM CONSUMER REPORTS 

September 21, 2016 

The Honorable Jason Chaffetz, Chairman 

The Honorable Elijah Cummings, Ranking Member 

Committee on Oversight & Government Reform 

U.S. House of Representatives 

Washington, DC 20515 

Dear Chairman Chaffetz and Ranking Member Cummings: 

Consumers Union, the policy and mobilization arm of Consumer Reports, 1 appreciates 

your Committee's continuing work to look for reasons behind, and solutions to, rising 

prescription drug prices and their impact on consumers. High drug costs impose a significant 

burden on the health and fmancial security of millions of Americans- nearly 60% of adults 

regularly take a prescription drug.2 

Consmner Reports is an expert, independent, nonprofit organization whose mission is to 

work for a fair, just, and safe marketplace for all consumers. We have a particular focus on the 

drug marketplace. As part of our work to help consumers find the best value when purchasing 

prescription drugs, in 2004 we launched Consmner Reports Best Buy Drugs. This program 

uses evidence-based, systematic reviews of prescription drugs to clearly demonstrate the 

efficacy and safety of commonly used medicines in over 30 categories. 3 We combine this 

information with reliable cost information, enabling consumers to truly identify the "best buy" 

for many drugs. 

1 Founded in 1936, Consumer Reports is an expert, independent, nonprofit organization whose mission is to work 

for a fair, just, and safe marketplace for all consumers, and to empower consumers to protect themselves. Using its 

more than 50 labs, auto test center, and survey research center, the nonprofit rates thousands of products and 

services annually. Consumer Reports has over 7 million subscribers to its magazine, website, and other publications. 

Its policy and mobilization arm, Consumers Union, works for health reform, food and product safety, financial 

reform, and other consumer issues in Washin1,>ton, D.C., the states, and the marketplace. It employs a dedicated 

staff of policy analysts, lobbyists, grassroots organizers, and outreach specialists who work with the organization's 

more than 1 million online activists to change legislation and the marketplace in favor of the consumer interest. 2 As of 2011-12, nearly 3 in 5 Americans over age 20 take at least one prescription drug. As of 2012, those taking 

five or more drugs has doubled since 1999-2000 to 15% of all Americans. Elizabeth D. Kantor et al., Trends in 

Prescription Drug Use Among Adults in the United States From 1999-2012, JA.lvfA. 2015;314(17):1818-1830. 3 http://www.consumerreports.org/healthibest-buy-drugslindex.htm. Note: Best Buy Drugs does not do costeffectiveness analysis. Instead, we present price data alongside the effectiveness, safety, and side-effect data And 

then we let consumers-in consultation with their doctors-interpret and adapt these data according to individual 

preferences, clinical circumstances, and priorities (including budgetary). 
93 


KING-6430 with DISTILLERInsert offset folio 19 here 24914.019

Rampant High Drng Prices 

A feature article in the August 2016 issue of Consumer Reports asks in its title: "Is There 

a Cure for High Drug Prices?"4 The article reports on the results of a nationally representative 

telephone poll of more than 2,000 consumers who take a prescription medication, conducted by 

Best Buy Drugs in March, finding that high drug prices are taking a serious toll on consumers. 

We found that 45 percent of people regularly take a prescription drug, and on average 

take between four and five medications. Three in ten people told us their out-of-pocket costs for 

one of their prescriptions has gone up in the past 12 months, costing them an average of $63 

more for a drug they routinely take - with a few being hit with increases of $500 or more. And 

for those consumers: 

47 percent took less of the drug than the prescription called for, to save money, with 17 

percent skipping or splitting doses, and 30 percent not filling the prescription at all. 

28 percent put off a doctor's visit. 

19 percent took an expired medication. 

19 percent postponed paying other bills to pay for their medications. 

As we noted in that article, one reason drug manufacturers are charging high, even 

exorbitant, prices is "because they can." Fundamentally, it is the lack of competition- the lack 

of consumer choice. 

The Mylan Example 

The focus oftoday's hearing, Mylan's five-fold hike in the price charged to consumers 

for a life-saving product, the EpiPen, is a glaring example. 5 Because our review of the facts has 

produced no legitimate justification for this inordinate price hike for EpiPens, this appears to be a 

calculated decision by Mylan to exploit the monopoly power that the company holds to enrich 

itself and its corporate executives6 at the expense of the millions of consumers - including 

families and children dealing with serious allergies and the possibility of life-threatening 

anaphylaxis - who use this life-saving drug and delivery system as a failsafe. 

Moreover, there are indications that a further marketplace abuse may also be at work 

here, an anticompetitive abuse that could be in violation of the antitrust laws. Although a 

company's exploitation of monopoly power, even to the extent that may be involved here by 

Mylan, may not by itself violate antitrust laws, it is a violation for a company to maintain 

monopoly power by sabotaging or undercutting efforts by competitors to provide consumers 

more choice. 

4 http://www.consumerreports.org/drugslcure-for-high-drug-prices/ 

'See, e.g., Solving the Problem of High Drug Costs, Consumer Reports, June 21, 2016, 

http://www.consumerreports.org/drugslsolving-the-problem-of-high-drug-costs/. 

6 See., e.g., EpiPen Price Rises Could Mean More Riches for Mylan Executives, NY Times, Sept. 1, 2016, 

http://www .nytimes.com/20 16/09/04/business/at-mylan-lets-pretend-is-more-than-a-game.html. 

2 
94 


KING-6430 with DISTILLERInsert offset folio 20 here 24914.020

There are a number of troubling reports that Mylan may have engaged in such 

anticompetitive conduct. These include: 

• Reports that Mylan attempted to influence the FDA to derail approval ofTeva's 

competing delivery system. 7 

• Reports that Mylan had earlier persuaded the same competitor, Teva, to delay its 

application for FDA approval, perhaps in an anti competitive "pay for delay" scheme. In 

fact, Mylan reportedly began its campaign to derail the application only as this delay was 

set to expire8 

• Reports that Mylan included restrictions in its contracts with schools purchasing the 

EpiPen at a discount under its EpiPen4Schools program, requiring these schools to agree 

not to purchase competing delivery systems.9 

Engaging in any of these practices to maintain a monopoly by blocking competition 

could very well run afoul of the antitrust laws. Accordingly, we have asked the Federal Trade 

Commission to investigate, and to take appropriate enforcement action as supported by the facts. 

On a related note, a year ago, Teva was seeking to acquire Mylan. The acquisition was 

abandoned in the midst of active antitrust investigation by the FTC, with a number of serious 

concerns being raised about the harms to competition that would result. The implications of a 

combined Teva!Mylan corporation under the current circumstances highlight the critical 

importance of vigorous merger enforcement in the health care marketplace-to protect both 

existing competition and the possibility of even greater competition-so that consumers have 

meaningful choices and can access life-saving drugs and devices. 

Exploring Solutions 

Our health care system is multifaceted, and the solutions go beyond antitrust. Among the 

steps worth considering are: 

• Limiting monthly out-of-pocket costs and addressing concerns about discriminatory 

formulary designs. 10 

7 See, e.g, I-Team: Company Behind EpiPen Fought to Keep Cheaper Generic off Market, 

http://www.nbcnewyork.cornlinvestigations/EpiPen-Cheap-Generic-Teva-Product-Mylan-Investigation-Drug-Cost39175887LhtmL 

8 See, e.g., id. 9 See, e.g., Mylan May Have Violated Antitrust Law in Its EpiPen Sales to Schools, Legal Experts Say, 

http://www.pb~:org/newshour/rundownlmylan-may-violated-antitrust-law-epipen-sales-schools-legal-experts-say/. 

1

° For example, Consumers Union recently helped pass legislation enacted in Califomia which caps a consumer's 

share of payment at no more than $250 for a 30-day prescription on all metals tiers except bronze, on which it is 

capped at $500. 

3 
95 

Æ 


KING-6430 with DISTILLERInsert offset folio 21 here 24914.021

Increasing transparency, by requiring Pharmacy Benefit Managers (PBMs) to reveal the 

negotiated cost of medications to employers. 

• Prohibiting Medicare Part D plans from using gag clauses that prevent pharmacists from 

otiering drugs at a lower price, if a lower price exists. 

Publishing the prices that the Veterans Administration pays, and that other countries pay, 

for drugs, so consumers and employers could use those prices as a benchmark. 

Measures that could more directly address the underlying causes of high prices and are 

worthy of consideration include: 

• Patent Reform- Patent terms should be reasonable, and granted only for real 

pharmaceutical advances. More selectively granting this legal monopoly, and more 

carefully limiting the monopoly period, could speed up the entry of new competing 

drugs that would provide choices and bring prices down. 

• Increased Comparative Effectiveness Research- Expensive new drugs may provide 

significant consumer benefits that are worth the higher cost, but it is often difficult for 

payers to know if the benefits truly justify the costs when a cheaper, slightly different 

alternative is available. Increasing funding for comparative effectiveness research, 

especially targeting expensive new drugs and drugs targeting a large patient population, 

could bring significant savings. 

• Medicare Negotiation-- Allowing Medicare to negotiate prices directly if the prices 

paid by Part D beneficiaries exceed the weighted average of what other developed 

countries pay, could bring down prices significantly in some cases. 

• Drug Re-importation Study solutions that would legalize re-importation from 

Canada, in a way that is overseen by FDA and ensures consumer safety, could reduce 

the cost for a number of drugs. 

Ensuring that consumers can afford the drugs they need and that they have access to 

reliable information on the comparative effectiveness of treatments will provide to a better 

consumer experience, better treatment compliance, and better health outcomes. We appreciate 

the Oversight and Government Reform Committee's continued attention to this issue of profound 

importance to our health care system and to consumers. 

Victoria L. Burack 

Health Policy Analyst 

Respectfully, 

4 

George P. Slover 

Senior Policy Counsel