The Scandal
In August 2016, outrage erupted when Mylan’s EpiPen 2-pack price reached $600, a 550% increase from $100 in 2007. The life-saving epinephrine auto-injector for anaphylaxis became a symbol of pharmaceutical price gouging, sparking Congressional hearings, lawsuits, and political backlash months before the 2016 election.
Timeline & Controversy
2007-2015: Mylan acquired EpiPen and steadily raised prices 15% annually while CEO Heather Bresch’s compensation rose from $2.4M (2007) to $19M (2015).
August 2016: Viral stories of families unable to afford school-required EpiPens. Bresch’s father, Senator Joe Manchin (D-WV), faced conflict-of-interest scrutiny after championing 2013 legislation requiring schools stock epinephrine.
September 2016: Mylan announced $300 generic version (still 3x 2007 price), expanded patient assistance programs. Congressional testimony where Bresch defended pricing while claiming $100 profit per $608 2-pack (later challenged).
2017-2020: Generic competitors entered market (Teva, CVS), prices dropped 50-70%. Class-action settlements totaling $260M. Mylan settled DOJ Medicaid overcharging claims for $465M.
Why It Mattered
- Monopoly Playbook: Patent extensions, authorized generic strategy blocking true competition, exploiting FDA approval barriers for “complex devices”
- School Requirements Created Captive Market: Legislation requiring schools stock EpiPens created guaranteed demand, pricing power over anxious parents
- Nepotism Optics: CEO daughter of sitting senator who promoted EpiPen legislation crystallized corruption concerns
- Bipartisan Outrage: Both Clinton and Trump condemned pricing; rare healthcare agreement during divisive election
- Precedent for Action: Mylan backlash emboldened future price-gouging scrutiny (insulin, Daraprim, opioid settlements)
The Science vs Economics
Epinephrine (adrenaline) costs pennies; device delivery system is the value-add. But device essentially unchanged since 1987 invention. Mylan spent $35M annually on advertising vs miniscule R&D, marketing fear (“Anything can happen, anytime”) to expand beyond severe allergy use.
Sources: Congressional testimony transcripts 2016, DOJ settlement documents, Wall Street Journal pharmaceutical pricing investigations, Kaiser Health News EpiPen timeline, STAT News Mylan coverage.