Shuttering a Union Manufacturing Plant

Joe Manchin’s Daughter Helped Shutter a Union Drug Plant, theintercept.com, Daniel Boguslaw

Also taken from “Can You Patent the Sun?” – Angry Bear,

What About Drug Costs?

The story of EpiPen is a good example of out-of-control pricing. In 2007 Mylan acquired the EpiPen brand from Pfizer. The acquisition did not include the Pfizer subsidiary manufacturing EpiPen. However, Mylan controlled the distribution. There is no story about out of control costs at the Mylan headquarters and main manufacturing facility. This is just a story about excessive rent taking, the change of a name to Viatris, the movement of corporate to Pennsylvania.

To a congressional committee, Mylan CEO Heather Bresch reported Mylan pays $69 per two-pack to the Pfizer subsidiary Meridian Medical Technologies (The Mercury News). The calculated costs were far less than what Pfizer was charging and even more so than the sales price.

The price of a two-pack of EpiPens grew to ~10 times its cost.

To calculate the costs of manufacturing a product, one does not need to be an engineer or a PhD. Knowledge of the overhead, process, materials, and labor allows an astute and experienced layman to calculate the cost. Even so in 2016, a Silicon Valley engineering consultancy (Scotts Valley) did perform an analysis of an EpiPen components and estimated the manufacturing and packaging costs at about $10 for a two-pack.

Whether the cost is $10 for a two pack or $34.50 for one EpiPen as Mylan claims, the costs do not vindicate wholesale price increases going from $100 in 2009, to $265 in 2013, to $461 in 2015, and finally $609 in 2016. The list price at a CVS pharmacy is $733 for a two-pack. With insurance, some still have a sizeable co-pay. In some cases, a manufacturer will issue a coupon to a buyer which can be used at the pharmacy and shuffles the costs to the insurance company leaving the user with a smaller co-pay. In the end, someone is still paying an out-of-control price.

Mylan did offer coupons.

Here is where it starts to get interesting. Heather Bresch is the daughter of Joe Manchin, the Senator from West Virginia.

Mylan CEO Heather Bresch in Congress

Heather Bresch led an embittered defense against allegations that she was directly responsible for inflating the cost of epinephrine, testifying before Congress in 2016 to defend her role in the price hikes. Legal documents reviewed by The Intercept showed that Bresch played a direct part in the decision to force consumers to purchase dual packs of EpiPens, a practice that necessarily inflated the product’s price.

In Court

In 2021, U.S. District Judge Daniel Crabtree greenlighted a trial for antitrust claims while rejecting a motion by the defense to remove Bresch from the defense roster.

“Like the old idiom that if it looks like a duck, quacks like a duck and swims like a duck, [it’s] probably a duck; so too if one is named as a defendant, deposed as a defendant, and alleged to be liable as a defendant, well, she’s a defendant,”

Paul Geller, attorney for the plaintiffs, in a statement.

“We look forward to seeing Ms. Bresch in Kansas.”

But the pending settlement’s final approval, meant former CEO Heather Bresch would never have her day in court.

The Settlement

“Attorneys are the Big Winners in Mylan $264 Million EpiPen Price Gouging Suit.” Pfizer settled their suit in separate litigation last year for $345 million. July 11 2022, Judge Daniel D Crabtree approved Mylan’s settlement of $264 Million. The settlement resolving class action antitrust claims brought against the company in the US District Court for the District of Kansas on behalf of end payers including insurers, pension funds, and consumers. CEO Heather Bresch never appeared to testify in court.

End of the story

As reported, Bresch was cleared in the price-inflation settlement. The Morgantown plant was shut down. West Virginia University is in talks to inherit the former Mylan facility. Just in time for Joe Manchin’s newly secured funds to power its research centers. 

Manchin’s cousin Joseph Gouzd was permanently injured in a boating accident on account of Joe Manchin. In an interview Joseph Gouzd told The Intercept that other companies had expressed interest in buying the plant to keep its assembly lines moving but that a lifeline-extending sale failed to materialize. Joseph Gouzd (Manchin’s cousin) said of Joe;

“He doesn’t want to be accountable to his constituents. He wants to talk a lot of bullshit and false promises.”

So much for explaining back home in West Virgina.

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Some other reading

“Kansas Judge Grants Partial Victory To EpiPen Marketer In Suit Over Price Hikes” | KCUR 89.3 – NPR in Kansas City

“Legislators Aren’t Buying Mylan’s Narrative” (wsj.com)

“Mylan CEO Faces Congressional Hearing Following EpiPen Price Surges” (wsj.com)

“Joe Manchin’s Daughter Played Direct Part in EpiPen Price Inflation Scandal” (theintercept.com)

“EpiPen maker to pay $264 million to settle lawsuit” (nbcnews.com)

“Mylan EpiPen antitrust $264M class action settlement” – Top Class Actions

“Mylan’s EpiPen Pricing Scandal” – Seven Pillars Institute