Trading Politics for Medical Profits

Pay-to-play, the merger of politics and business, has many features including how to exploit political influence to maximize business profits even when children’s lives are at risk, says Michael Winship.

By Michael Winship

Cash and carry has become nothing more than standard operating procedure in politics and government, and it’s wrecking the republic. The whole system is rotten to the core, corrupted by big business and special interests from the seventh son to the seventh son.

Or daughter, as we learned these past few days when the news introduced us to Heather Bresch, CEO of a drug company called Mylan and daughter of Democratic U.S. Sen. Joe Manchin III, who’s also the former governor of West Virginia.

Liza Minnelli and Joel Grey performing "Money Makes the World Go Around" in the movie, "Cabaret."

Liza Minnelli and Joel Grey performing “Money Makes the World Go Around” in the movie, “Cabaret.”

Mylan manufactures and sells EpiPen, the emergency delivery system for an allergy drug, epinephrine, that can make the difference between life and sudden death. The cost for a two-pack of the devices has soared nearly 550 percent to $608.61. That’s a price far beyond the means of most families with kids threatened by possibly fatal allergic reactions.

At the same time, Bresch has seen her own compensation increase a whopping 671 percent, from $2,453,456 in 2007 (the year that Mylan bought EpiPen) to $18,931,068 in 2015.

She should resign for price gouging rather than get a raise, but like so many of her fellow executives Bresch sails serenely on as her fellow Americans drown in health care debt. Her career and the success of her company epitomize everything that so enrages every voter who believes that the fix is in and that the system is weighted in favor of those with big money and serious connections.

According to reports, Bresch got her first job at Mylan working in the factory basement, when her well-connected dad asked the company’s then-CEO, Milan Puskar, for a favor. Later, a scandal erupted when it was discovered that West Virginia University, which had received a $20 million donation from Puskar and whose president was a Manchin and Bresch family friend, had awarded her an MBA although she had not completed the required coursework.

The school president and other administrators were forced to resign, but Bresch survived the controversy and has done very well indeed in the pharmaceutical business, rising through the ranks and at the same time learning how to adroitly manipulate government and its regulations — lessons for which life in a successful political family with its network of friends and colleagues prepared her well.

For a time, she was Mylan’s chief lobbyist (working to help pass the 2003 Medicare prescription drug bill, among other legislation) and Anna Edney at Bloomberg Politics writes that “Mylan spent about $4 million in 2012 and 2013 on lobbying for access to EpiPens generally and for legislation, including the 2013 School Access to Emergency Epinephrine Act, according to lobbying disclosure forms filed with the Office of the Clerk for the House of Representatives.

Mylan also was the top corporate sponsor of a group called Food Allergy Research & Education that was the key lobbyist pushing for the bill encouraging schools to stock epinephrine auto-injectors, of which EpiPen is by far the leading product.”

The company also took advantage of what President Obama has called an “unpatriotic tax loophole,” making a deal in 2014 with Abbott Laboratories to incorporate in the Netherlands — one of those infamous “inversions” that allow companies to pay a much lower tax rate abroad than here at home — even as they rake in profits from US taxpayer-subsidized programs like Medicare, Medicaid and veterans’ benefits. Political expedience and maybe embarrassment saw Joe Manchin denouncing his daughter’s inversion deal. But no one stopped it.

Like so many businesses eager to purchase politicians all their own, Mylan has made significant cash contributions to both sides of the aisle. Emmarie Huetteman at The New York Times reports, “Mylan’s political action committee has given at least $71,000 to congressional candidates from both parties this election cycle,according to the Center for Responsive Politics, with about 72 percent of those contributions going to Republicans.”

Dad got a taste, too: “It has been one of the biggest donors to Mr. Manchin since he joined the Senate in 2010, giving more than $60,000 in total.”

Mylan also has brushed up against both Donald Trump and Hillary Clinton. The company has contributed up to $250,000 to the Clinton Foundation and one of its leading stockholders — with 22 million shares — is the hedge fund owned and managed by billionaire John Paulson, a big Trump bankroller.

Hillary Clinton decried the EpiPen price hike as “outrageous, and just the latest example of a company taking advantage of its consumers.” Several of Manchin’s Senate colleagues have called for hearings and an investigation into Mylan. Manchin himself has said he is “aware” of the soaring prices of prescription drugs and looks forward to reviewing Mylan’s response. He did not mention his daughter’s name.

Meanwhile, in response to the current furor, Mylan announced plans to widen a patient assistance plan, provide $300 savings cards and on Monday said they would begin producing a generic alternative to the EpiPen that would cost half as much (there’s a certain rounding of the circle, even irony here, as Mylan began business as a manufacturer of cheap generics).

But of the expanded assistance plan, Mike Hiltzik at the Los Angeles Times says, “at heart it’s a cynical move that actually protects the company’s profits and harms the health care system… In fact, they’re illegal when applied to Medicare or Medicaid patients, because they may violate federal anti-kickback laws, which bar payments made to induce patients to choose particular services. Insurers and government programs will have to cover everything beyond the co-pay or deductible…”

And even at half-price, the cost of an EpiPen remains an outrage. In fact, some estimate that the dose of epinephrine used in the injector may really cost as little as a dollar.

In other words, this is one more, big old scam — yet another case of big business trying to pull the wool over the citizens’ eyes and pick our pockets while the government and our politicians mostly look the other way.

The Mylan mess is the cozy relationship between regulators and the regulated in a nutshell. Throughout government, politics and business, cash contributions are made, connections are used, strings are pulled and favors are requested and returned. So the system wins again, corrupt as hell.

But take notice. Realize that the rest of us are more and more aware of how we’re being had — and that we truly must be heard and heeded. Unless the tiny-hearted, gold-digging CEOs of America’s corporations and our leaders get the dollar signs out of their eyes and come to their senses, they are writing a prescription for an angry public response that not even their bought-and-paid-for Congress can hold at bay.

Michael Winship is the Emmy Award-winning senior writer of Moyers & Company and BillMoyers.com, and a former senior writing fellow at the policy and advocacy group Demos. Follow him on Twitter at @MichaelWinship. [This article first appeared at http://billmoyers.com/story/drugs-privilege-big-business-congress-epipen/]

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9 comments for “Trading Politics for Medical Profits

  1. Zachary Smith
    August 30, 2016 at 11:43 pm

    I’ve been hearing a lot lately about the wonderful Clinton Foundation’s charity work, so on a whim I made a google search for “Mylan” and “Clinton” and -2015 and -2015. (I’ve noticed google searches including the term “clinton” tend to be extremely flaky)

    Press Release: President Clinton, Pfizer, and Mylan Announce New Agreements to Lower Prices of Medicines for Patients with Drug-Resistant HIV in Developing Countries

    Notice that these drugs are merely “lower” priced. Giving a Haitian patient who – on a good day – might earn $2 is something a missionary might do, but not a Good American Capitalist.

    https://www.clintonfoundation.org/main/news-and-media/press-releases-and-statements/press-release-president-clinton-pfizer-and-mylan-announce-new-agreements-to-lowe.html

  2. Bill Bodden
    August 31, 2016 at 12:27 am

    This is just another example of a business decision that is completely devoid of any moral principles and part of a way of life that can only lead to the decline and fall of the American empire if not reversed.

  3. Joe Tedesky
    August 31, 2016 at 12:36 am

    That’s what this generation needs, is it’s own Teapot Dome Scandal. Only if they take down the good senator from West Virginia then I would only encourage our good legistors to continue on, but they won’t.
    How this Mylan case should be looked upon, as well as what the article stated, Mylan is a case of a nice little U.S. company gone Global. It will take a team of economist to someday tell us, just how cool going global is. It’s a spinning corporatocracy that just won’t quit. Mylan was buying the bigger companies small little pharmaceutical niche divisions, and spicing up their own game. That’s all great, but then come the speculators (why I don’t know) then they get to floating numbers around (yes, like kids) and WA la you have $600.00 epi-whatever’s and a law requiring the use for them epi-things and that will more than pay for the tooling cost. More small companies in any country should try, and soak up these small niche numbers, and wring it for all it’s worth…..but we are talking healthcare here.

    As long as this country’s feels fit to allow profit to exceed good health, this is what you will get every time. We don’t think smart nor humanitarian in any way, because people will say why I earned it …why is healthcare not a human necessity? Don’t blame it on the doctors. The doctors were tamed down a long time ago. Doctors and Nurses should be paid well. When your doctor prescribes a certain medicine who is it that, that has the final say to you being allow to getting that prescription filled…. You know, it ain’t the doctor. I think the one word for all our country’s problems is the revolving door and the corporates who profit.

    Ask any marine how he feels knowing the next best weapon that’s coming down the line, is now being designed by his ex-idiot-general who now works for the defense weapon something or other. We could be buying companies who manufactur medical equipment, bulldozers, anything and go global without war. Why, does it always have to be war. Make healthcare a right, and make up for it by manufacturing something to save the
    environment….anything but war. If the DOD should locate that missing 6.5 trillion give some it to our nations healthcare, and slow down on the killing.

  4. Realist
    August 31, 2016 at 2:44 am

    Epinephrine is the same thing as adrenaline, which is a hormone that we all naturally produce in our bodies. It controls a constellation of physiological responses in the body, notably heart rate and blood pressure, but is most famous for its role in the “fight or flight response.” To call it an “allergy drug” is just crass commercialism, though it is used in, among other things, treatment of life-or-death anaphylaxis reactions. It was first purified in 1901–115 years ago! It can’t possibly be proprietary. And, if it is, it is a crime of the first magnitude. Perhaps the delivery system, called a “pen,” is patented, though that is used in the delivery of other life-saving substances, such as insulin. All this pen happens to be is just a syringe pre-loaded with a single measured dose of epinephrine. Surely that doesn’t make the combination worth $600 when the value of the epinephrine itself is less than one dollar! I suggest that other manufacturers–ideally non-profits–devise a competing delivery system (the syringe has been in the public domain for a very long time) and drive these thieves out of business. They and Martin Shkreli have disgraced this country no end. The world must think we are as grasping and greedy as humans can possibly be. While we are at it, those of us living in West Virginia ought to drive the Manchin Family out of their government sinecure.

    • Bart in Virginia
      August 31, 2016 at 8:32 am

      Do a search on ‘epinephrine teva’ and you’ll see who wanted to make a generic and was temporarily turned down by the FDA.

      • chris moffatt
        September 1, 2016 at 6:49 am

        when I looked into this a while back I found there is a generic injector called Adrenaclick that is available (or was then) for about 1/3 the current Mylan price. But people have to ask the doc to write the prescription to allow generic substitution otherwise the pharmacy must supply the Mylan product. I also note that online canadian pharmacies supply the Mylan product for around $120.

  5. Erik
    August 31, 2016 at 7:43 am

    This is of course true throughout US business and its non-regulation by government. There is almost no product quality regulation, although it drastically reduces consumer costs. It is not even discussed because the media are owned by the oligarchy, as well as elections.

    To suggest that consumers or voters will get angry some day may have a slight effect. But what we need are amendments to the Constitution to protect elections and mass media from money, by restricting their funding to limited and registered individual contributions. That cannot be done because those are the tools of democracy, already owned by oligarchy.

    Any activist president would have seized mass media and given them to the universities, investigated Congress and dismissed the corrupt. Then he/she would have held new elections and demanded laws to regulate mass media corporations. There is no other peaceful way.

    Others should seriously consider the other ways.

  6. Cal
    August 31, 2016 at 4:00 pm

    Not much to say I’ve been ranting on this for 22 years.

    Probably a trillion words have been expended on this travesty and to date nothing has been done about it.
    Even Med D is a rip off. The retail price of Adair inhaler by GKS is $328 in the US—when I forgot mine on a trip to England I got a script for the exact same GKS inhaler and bought one there for $66. I currently use an extra inhaler that cost $153—ordering it from Canada cost me $57…a third of the US cost.

    I’ve converted everyone I could to ordering their meds from Canada and been doing it myself for 16 years.
    The FDA will tell you its illegal. Its not. Little noticed was that Bush Jr actually did something right and signed a order preventing prescription drugs from being seized at the border cause he didn’t want hordes of old folks fighting with the border guards. As a result the US PO doesn’t seize them either. The FDA unknown to most Americans inspects all overseas drug manufactures that import or want to import into the US—so a lot of ‘generics’ are available from India and ect long before they are available in the US.

    But now congress has a new move afoot to outlaw ordering drugs from Canada because the drug companies have seen how many Americans are doing just that.

  7. caseyf5
    August 31, 2016 at 4:45 pm

    Hello Michael Winship, The ideal solution is a total takeover of Big Pharma with no compensation as they have stolen Trillions and Trillions of dollars from the citizenry of the US of A. If this doesn’t occur then Single Payer or Medicare for All are the lesser alternatives. The last alternative is to induce our friends in ISIS or any of the other variants to come here and take 12 inches off the tops of the GREEDY EVIL Corpse-O-Rations Executives and place their heads on pikes outside their Corpse-O-Rations headquarters (many in foreign lands) as a warning that ‘WE ARE MAD AS HELL AND WON’T TAKE THIS ANYMORE!!!!!!!!!!!!!!!!!!!!

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