
EpiPen Maker Mylan Tied Executive Pay to Aggressive Profit Targets - helloworld
http://www.wsj.com/articles/epipen-maker-mylan-tied-executive-pay-to-aggressive-profit-targets-1472722204
======
rdtsc
> The company, based in the Netherlands but managed from Canonsburg, Pa.,
> outside Pittsburgh, has grown from a sleepy generic maker to a global player
> with $9.4 billion in revenue last year. Pay has grown, too. Ms. Bresch, the
> CEO, earned $18.9 million last year, up from $9 million in 2013. [...] Ms.
> Bresch was found to have wrongly claimed to have an M.B.A. degree from West
> Virginia University.

A company based in Netherlands, managed from Pittsburgh, by a person who lied
about their credentials, is now modulating the rate of asthma deaths from
anaphylaxis of American children. Yap. As Hunter S. Thomson said, "in a
democracy you have to be a player". She is a good player...

Yet anyone dare mention nationalized medicine or price controls and that is
met with pejoratives like socialism, anti-Americanism, and anti free market.
"But you can't do that! You'll upset the free market Gods".

Somehow we manage to keep spending trillions on things like F-35, we manage to
build tanks nobody needs ([http://www.military.com/daily-
news/2015/01/28/pentagon-tells...](http://www.military.com/daily-
news/2015/01/28/pentagon-tells-congress-to-stop-buying-equipment-it-doesnt-
need.html)), send billions in foreign military aid to countries in the ME
(Israel $3B+ and Egypt $1B). Yet anyone dare suggesting price controls for
EpiPens -- and oh no, socialism will kill us all.

~~~
grandalf
> anyone dare mention nationalized medicine or price controls

Uh, the US medical system is full of price controls on pretty much everything
that is a "service" and not a product.

> Somehow we manage to keep spending trillions on things like F-35

Yes, these are a horrible and unconscionable waste of resources and blight
upon the world. But the American left is just as much in favor of military
excess as the American right.

------
chris_va
Investors seeking profits? The horror!

Profits are what caused investors to create these companies in the first
place, so without that we wouldn't have EpiPens.

In this particular case, there is an anti-trust argument to be made (after the
generic got pulled), but drug development is a side-effect of investors
seeking maximum returns. If anyone here thinks there is a better system for
drug development, I think we'd all love to hear it.

~~~
asdfologist
Exactly. If you decimate pharma companies' profits, you kill their incentive
to innovate. You can't have it both ways.

~~~
toomuchtodo
Let the NIH and DARPA innovate and be done with the sham for-profit pharma is.

~~~
asdfologist
The NIH and DARPA are more than welcome to compete with the pharmas and offer
lower prices. This is exactly how capitalism works.

------
aub3bhat
It's interesting how clear political ties between Mylan and Democratic party
are swept under the rug. Also the Mylan CEO was instrumental in ensuring that
FDA didn't approve any competing products because more regulation is always
good. Warren, Clinton et. al. are all Pharma funded politicians. Don't get me
wrong I think Obamacare is great but had this been case related to an oil
company, there would have been 20 different Vox, Atlantic articles blaming
Republicans.

However this time since it does not fits the optimal political pattern the
outrage is far more silent.

~~~
asdfologist
If that's so newsworthy, then why hasn't Fox News brought it up? I think it's
pretty well known that conflicts of interest are rampant throughout the
government across party lines. I don't think there's any liberal conspiracy
going on here.

~~~
at-fates-hands
>> then why hasn't Fox News brought it up?

They've been on it since the 23rd and have reported on it nearly every day:

[https://www.google.com/webhp?sourceid=chrome-
instant&ion=1&e...](https://www.google.com/webhp?sourceid=chrome-
instant&ion=1&espv=2&ie=UTF-8#q=fox%20news%20mylan%20epipen)

~~~
asdfologist
I think you need to reread my comment and the OP's. We're talking about
reporting the pharma ties among the Democrats.

------
mxuribe
This whole thing related to such excessive pricing for such an essential thing
in life for some, so vividly shows the ugly side of capitalism.

~~~
grandalf
> the ugly side of capitalism

True if you mean the thing we call capitalism in the US.

The only reason the price of a $1 piece of plastic can possibly be so high is
because of a very noncompetitive situation created by various cronies and
abetted by regulators.

Let's call it what it is. It's not capitalism, it's simply a corrupt
regulatory system and firms that have learned how to exploit it to their
advantage. it's nothing like a _market_ that allows competition, and the
regulation is nothing like a fair referee that allows the best player to win.

Under _actual_ capitalism, there would have been price competition and perhaps
(gasp) a startup would have started selling epi pens for a reasonable price
just as Google started offering massive email storage for a reasonable price,
etc.

While I understand the emotional reaction that it is "essential for life" (I
have family members who rely upon them), let's blame what is actually at
fault, _laws_ that allow firms to do this sort of thing and _prevent_
solutions from emerging.

~~~
ceejayoz
> perhaps (gasp) a startup would have started selling epi pens

The first version of Soylent lacked _iron_ because Rhinehart couldn't be
bothered to Google basic nutrition requirements.

We've tried the no regulation medical market. The term "snake oil salesman"
exists because of it.

~~~
cookiecaper
You're talking about different things. Foodstuffs can and should be regulated
to a reasonable degree, and they are regulated, not only by the FDA but also
by state departments of agriculture and local departments of health. Whether
an early iteration of Soylent should've been legal or not is beside the point.

The point is that, iirc, Mylan has a government-granted monopoly on the EpiPen
via a patent for the injection mechanism. That means Mylan is the only company
that is legally allowed to manufacture it in the United States. In addition,
it takes millions of dollars to bring a treatment through the slow FDA
approval process (though it's not clear if this is necessary to compete with
EpiPen), so even if someone was somehow able to circumvent and/or license any
patents Mylan may hold, it'd still take herculean resources to bring a
competitor to market.

That's what the grandparent is talking about. The EpiPen can be so expensive
because no one else is legally allowed to sell a substantially similar device
without Mylan's permission. When the consumer has only one option,
_especially_ for something as crucial as a life-saving medication, things are
really bad, whether the economic system that consumer is living under calls
itself "capitalism" or something else.

We've got to fix our intellectual property laws, both patent and copyright. A
large part of the Fortune 500 is only there because of the excessive legal
monopolies that we've granted through intellectual property (which means it'll
be basically impossible to fix).

~~~
ceejayoz
> The point is that, iirc, Mylan has a government-granted monopoly on the
> EpiPen via a patent for the injection mechanism.

No, they don't. The EpiPen's patent is long expired.
[https://www.google.com/patents/US4031893](https://www.google.com/patents/US4031893)

~~~
cookiecaper
I know that some patents on the device have expired. However, there still
seems to be frequent reference to Mylan's current eligibility for patent
protection. Here's one such reference from a New York Times editorial,
published today [0]:

> _Today that same tiny, lifesaving bolus of epinephrine — used mostly to
> treat severe allergic reactions — is delivered via sometimes elaborate
> devices called auto-injectors. Though the medicine itself hasn’t changed,
> the delivery devices have been protected by patents, enabling drug makers to
> charge ever escalating — sometimes prohibitive — prices for one of the
> oldest drugs in medical use._

It doesn't say which patents specifically may cover the EpiPen, but as far as
I can tell, the consensus is that the device is patent protected. I would love
to know if there's definitive evidence either way -- specifically which
patents Mylan claims to be protected under, or whether this is in reality just
a common assumption/myth.

[0] [http://www.nytimes.com/2016/09/04/opinion/sunday/the-
lesson-...](http://www.nytimes.com/2016/09/04/opinion/sunday/the-lesson-of-
epipens-why-drug-prices-spike-again-and-again.html)

------
rayiner
Because no companies tie executive pay to profit targets.

~~~
toomuchtodo
Nobody dies if you can't afford Tide.

People forgoing medically necessary healthcare and medication is where the
problem lies with aggressive profit seeking where demand is inelastic.

Now, if the US government would simply allow imports of equivalent medications
and devices when this sort of rent seeking occurs (from other first world
countries where the price is set through a single payer system), we wouldn't
be having this conversation.

~~~
rayiner
The opposite of rent seeking is not prices set in monopsony systems.

~~~
toomuchtodo
True, but it's what's called for in what shouldn't be a marketplace:
healthcare

~~~
tptacek
Why shouldn't health care be a marketplace? You can live without health care
far longer than you can without food, which is, like, the canonical
marketplace.

------
sandworm101
Companies are neutral. "The company" didn't make this decision. It was the
board of directors, flesh and blood people. The board of directors was elected
by shareholders. Who are the shareholders?

[http://investors.morningstar.com/ownership/shareholders-
majo...](http://investors.morningstar.com/ownership/shareholders-
major.html?t=MYL)

Largest shareholder: Vanguard Health Care (5%) ... which is in turn owned by
STAAR Alternative Catagories.

[https://www.zacks.com/funds/mutual-
fund/quote/SITAX](https://www.zacks.com/funds/mutual-fund/quote/SITAX)

And STAAR Alternative Cats is managed by one J Andre Weisbrod.

~~~
DashRattlesnake
If the largest shareholder is a mutual fund, then the shareholders so far
removed from the actual situation that I think the onus for ethical decision-
making falls on the executives and the board of directors. They're the ones
with the knowledge and focus to be able understand the consequences of their
decisions on the people who rely on their products.

~~~
yuhong
I hope at least they don't depend on constantly increasing stock prices,
otherwise they are likely the source of the problem in the first place.

