Long before Mylan inspired national outrage for increasing the prices of its popular EpiPen, the pharmaceutical company was quietly spending millions trying to gain favor both with politicians and physicians, according to an investigation by 9Wants to Know.
The money allowed Mylan to help change laws across the country as it boosted its brand awareness. In light of the national furor that has now developed, the campaign contributions also call into question the sincerity of politicians, physicians, and even members of the press as they collectively announce their displeasure with the cost of a drug that has been around for more than a century.
A dollar of medicine in a $600 injector
The amount of epinephrine in an EpiPen generally runs a dollar or less according to the National Average Drug Acquisition Cost (NADAC), which is collected by Medicaid. It’s the plastic auto-injector that Mylan uses to justify the current-day $600 price tag for a two pack.
It didn’t used to be that expensive.
When Mylan bought the rights to the EpiPen – a device developed for the military in the 70s – the company began the price hikes in earnest.
A $100 price tag for two EpiPens in 2007 blossomed to nearly $340 in 2014. The following year, it became more than $400. This year, the price topped $600.
Mothers like Alissa Romero of Larkspur found themselves incredulous.
Her young daughter and son both have food allergies serious enough to warrant a yearly purchase of two packs of EpiPens.
That meant this year, her purchase approached $1000 after insurance.
She, like many parents, wondered how it finally got to this point. As it turns out, there have been plenty of opportunities for the country to question the price hikes.
Mylan spent millions on politicians and physicians
In 2008, the year after Mylan purchased the rights to the EpiPen, the company’s lobbying budget topped a million dollars, according to data maintained by the Center for Responsive Politics.
By comparison, in 2007, that same lobbying budget was much closer to a quarter of a million.
In 2013, as Mylan was in the process of spending $1.5 million lobbying its members, Congress passed the School Access to Emergency Epinephrine Act.
The law would allow schools across the country to carry epinephrine auto-injectors and administer a dosage to students who appear to be having a life-threatening allergic reaction.
Today 49 states allow schools to stock injectable epinephrine. Colorado passed its law in 2013.
While the laws are generally heralded for saving lives, they have also allowed Mylan to increase its brand awareness in a market that has grown decidedly void of any serious competitors.
“If you look at it strictly from a brand awareness and marketing standpoint, it was brilliant,” said Bud Bilanch, who once worked for a giant pharmaceutical company and now teaches at the Daniels College of Business at the University of Denver.
Yet Mylan didn’t stop with just changing laws.
The federal government now requires all payments by pharmaceutical companies to doctors be publicly disclosed.
The requirement provides a window into the world of Mylan as it tried to befriend doctors with the power to recommend the product to patients.
In 2013, Mylan handed out $685,000 in EpiPen-related payments and giveaways to doctors across the United States. In 2014, the company upped the number to $1,158,000. Last year, Mylan distributed $1,208,000 - an increase in payments of nearly 70 percent.
Some of those doctors started showing up on television news programs talking about allergies and the benefits of EpiPens. Few were ever questioned about their payments from Mylan.
Most of the payments were small, but in 2015, 124 doctors received more than $1000 a piece. Some doctors received higher payments since 2013, several doctors reported receiving multiple payments that added up to more than $50,000.
This year, according to data from Kantar Media, Mylan also spent at least $7,000,000 pushing a television ad titled “Face Your Risk” designed to capture a first-hand account of anaphylactic shock.
All while the price of EpiPens continued to increase. Mylan increased the cost nearly 400 percent since purchasing EpiPen in 2007.
Mylan says system incentivizes higher prices
Mylan did not return our request for comment, but CEO Heather Bresch said in an interview with CNBC: “This isn’t a Mylan issue. This is a healthcare issue. The irony is the system incentivizes higher prices.”
Mylan announced plans to release a generic version of the EpiPen for $300 this week and offers a $300 coupon for those with insurance to help cover the out-of-pocket costs of EpiPen.
Now many of the same legislators who failed to ask tough questions of Mylan when they were passing laws that were bound to benefit the pharmaceutical company are voicing their anger over Mylan’s pricing practices.
Some of the most vocal have even taken payments from Mylan.
Both Senators Chuck Grassley (R-IA) and Patrick Leahy (D-VT) have taken $17,000 each.
It certainly doesn’t call into question all of their motives. As a spokesperson for Sen. Grassley told us, “Sen. Grassley accepts campaign contributions that are legal and come with no strings attached. Contributions don’t have any effect on his inquiries.”
It does, however, raise the issue just how close Mylan got to the very process that had been designed to at least try to keep medical prices in check.
After all, the company is run by the daughter of the Democratic Senator Joe Manchin from West Virginia.