Here's what you need to know about the CEO behind the big EpiPen price hikes
Dan Mangan| @_DanMangan
Wednesday, 24 Aug 2016 | 4:14 PM ET
Pro: Heather Bresch made a big mistake - Wednesday, 24 Aug 2016
CEO Heather Bresch is coming under new scrutiny for her company's decision to raise the price of lifesaving EpiPens more than fourfold over the past eight years.
For people who closely watch the pharmaceutical industry, Bresch is well-known. But among a broader audience, few people know who she is.
That is changing as Democratic presidential nominee Hillary Clinton, the American Medical Association and a number of U.S. senators are calling on Bresch to roll back the steep price hikes on EpiPens.
So, who is Bresch, and what is her backstory?
The CEO is the daughter of a U.S. senator. She reincorporated her U.S.-based drug company in the Netherlands, which cut its tax liability.
She also retroactively was awarded an MBA from West Virginia University while her dad was governor of that state despite not having enough academic credits. At the time, the university's president was both a former lobbyist for her drug company and a high school classmate of hers.
And Bresch has also overseen her company's increase in the price of EpiPens from $100 in 2008, to more than $600 for some customers today. During that time, her compensation has risen nearly 700 percent
When Bresch took over as CEO in 2012, Mylan's stock was trading at almost $22 per share. The shares are up 101 percent under her leadership. Revenue has risen 38.5 percent since she took over, to $9.47 billion at the end of 2015.
Bresch, 47, has been thrust in the spotlight in recent days after colleagues of her father Sen. Joe Manchin, D.-W.Va., in the Senate have expressed outrage about the stunning price hikes for EpiPen, a device that contains just a dollar or so's worth of the drug epinephrine.
EpiPens are used by people having an allergic reaction known as anaphylaxis, which can be fatal. People with allergies — or parents of children with allergies — are encouraged to have multiple sets of EpiPens for home, school and elsewhere. While insurance often covers some of the cost, many people have to pay out of pocket for the devices, sometimes up to the full price.
Clinton, a former senator from New York, on Wednesday called Mylan's price increases "outrageous," and "just the latest troubling example of a company taking advantage of its consumers."
"Since there is no apparent justification in this case" for the EpiPen price hikes "I am calling on Mylan to immediately reduce the price of EpiPens," Clinton said in a statement.
The AMA, the nation's largest doctors' group, earlier Wednesday said that "with lives on the line, we urge the manufacturer to do all it can to rein in these exorbitant costs."
Bresch, who has been CEO since 2012, did not return a request for comment from CNBC on Wednesday.
Neither did Mylan nor Bresch's father, Manchin, whose Senate colleagues are calling for hearings on the price of EpiPens, and one of whom, Sen. Amy Klobuchar, D-Minn., has asked for the Federal Trade Commission to investigate.
Employees at Mylan and a political action committee affiliated with the company from 2009 until 2012 contributed a total of $127,500 toward Manchin's special election to the Senate and then re-election in 2012, the second-largest amount of any single company toward Manchin, according to OpenSecrets.org. Records from OpenSecrets show that Mylan has given $72,543 to Senate and House of Representative members' campaign committees so far this year, but Manchin's more than $57,000 haul in 2012 from the company is more than five times the amount the firm gave to any other single candidate.
On Wednesday, Wells Fargo, in a research note, said that disclosure documents show that Mylan has been "actively lobbying" in favor of a bill in the Senate that would mandate that all airlines, domestic and foreign, carry at least two packs of epinephrine auto-injectors. EpiPens are, by a large degree, the most commonly used devices of that nature in the United States.
Mylan has spent a reported $875,000 on lobbying so far this year, after having spent $1.55 million in 2015, according to OpenSecrets.org,
On Tuesday, CNBC noted how Bresch's company, in addition to hiking the price of EpiPen by double-digit percentage amounts ever since Mylan acquired the device in 2007, has also been sharply raising the prices of other products this year.
Tom Williams | CQ Roll Call | Getty Images - Sen. Joe Manchin
In a research note in June, Wells Fargo had highlighted the fact that Mylan raised prices by more than 20 percent on 24 products, and by more than 100 percent on seven products. They include prices for generic drugs for common conditions such as gallstones (up 542 percent), gastroesophageal reflux disease (up 444 percent) and irritable bowel syndrome (up 400 percent).
As a result of the company's financial performance, Bresch's compensation hit $19 million last year, up from $2.45 million in 2007. Over the same period, an EpiPen's average wholesale price was being hiked by 461 percent.
Last year, Mylan, whose main offices are in Pennsylvania, reincorporated in the Netherlands, in what Bresch said was a defensive move against a possible takeover, but which also lowered the company's tax liability. Bresch's senator father Manchin is on the record as being opposed to tax inversions.
Even after that tax inversion, Mylan argued to the FTC that it should be treated like an American company for the purpose of U.S. antitrust regulations, which would have made it tougher potentially for Israel-based Teva Pharmaceuticals to acquire Mylan.
Teva launched a hostile takeover bid in April 2015 for Mylan. Teva dropped that bid in July 2015, and months later Mylan failed in its own effort to buy generic drug manufacturer Perrigo for $26 billion.
Source: EpiPen
"We know the inversion has invoked a lot of emotional and political banter but the reality is we remain a U.S. issuer under all of the formal and informal guidelines," Bresch told the Bloomberg news service at the time, in June 2015.
Bresch, who started as a data entry clerk at Mylan, was named chief operating officer in 2007. As STAT News noted Wednesday, at the time she was promoted to that position, Mylan pointed out that she had a Master of Business Administration from West Virginia University, which she claimed to have received in 1998.
In fact, a Pittsburgh Post-Gazette newspaper investigation in 2007 said school records indicated that Bresch had obtained just 26 academic credits out of the 48 credits required for an MBA.
The paper found that WVU awarded Bresch her degree retroactively in 2007, after initially telling the newspaper that she never received her degree, and after Bresch insisted she had. Manchin was the state's governor at the time. The school, which had received more than $20 million in donations from Mylan's founder, claimed that Bresch had "completed all the requirements" for an MBA, except for paying a $50 graduation fee.
However, an investigation panel set up at WVU — whose then-president was Bresch's high school classmate and former Mylan lobbyist Mike Garrison — found that "Ms. Bresch did not earn an MBA at West Virginia University."
"The Panel finds further that the actions undertaken by WVU administrators in October of 2007 to determine whether Ms. Bresch had earned an MBA degree in 1998 and to thereafter modify her transcript were seriously flawed and reflected poor judgment," the panel said in its final report. "The Panel finds the rush to judgment in Ms. Bresch's case was driven primarily and inappropriately by concerns about public relations and by Ms. Bresch's high profile."
The university's senate overwhelmingly voted to compel Garrison to resign as WVU's president on the heels of the report. In response, he announced his resignation in June 2008, effective that September. A county grand jury later decided not to indict Garrison or anyone else in the MBA scandal.
That scandal has drawn renewed attention in recent days as controversy swirled over Mylan's EpiPen pricing practices.
Last year, Bresch told Fortune magazine, "I certainly to this day believe I did everything I needed to do to get my degree."
CNBC: Mylan CEO Heather Bresch, Thursday, 8:30am ET on "Squawk Box."
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My granddaughter, Stella (above as my profile picture) carries "EpiPen" all the time in her small backpack.
She is extremely allergic to peanut and may need it at any time she gets exposed to peanut dust.
Mylan is charging $600 for it that actually a vial of epinephrine costing less than a dollar with a syringe.
To make epinephrine, Mylan has not spent even a penny for research and developement except it's auto injector.
Also, the drug expires in a year and people have to keep buying it.
However, legal mambo-jambo together with dirty phamaceutical companies allowed such thing going on.
I don't know why such thing is going on in America.
No one has said anything until now.