The maker of EpiPen kept repeating one stat to Congress, and it's total nonsense
Reuters
Bresch was less than effective, to say the least.
One of the points she made over and over in her defense was that Mylan had saved the American people $180 billion on drugs. She didn't explain how.
But Bresch did use that figure to justify her 617% compensation increase. Bresch, who started out at Mylan as an executive assistant, made $18 million in 2015.
Anyway, back to that $180 billion number. It's pretty big, so we had to ask Mylan how it calculated it. Here's the company's response:
According to the Generic Pharmaceutical Association's 2015 Generic Drug Savings in the U.S. report, from 2005 to 2014 generic drugs saved the U.S. healthcare system $1.68 trillion. During this time period, Mylan's average market share of the generics market was about 11%, which equates to Mylan delivering approximately $180 billion in savings to the US healthcare system.
So let me get this straight, Mylan. You're saying that over a 9-year period, your company saved the country $180 billion by simply being in the generics business?
If that's the case, we're not talking heroism here. We're not talking big discounts or any kind of major sacrifice or goodwill from the company, we're talking about the company literally just performing its function. The inherent nature of a generic drug is to cost less than a branded drug.
This is like Toyota saying Camrys save the US money because Americans could've been buying Ferraris.
Bresch didn't specify in her testimony that she was talking about generics, or that she was talking about a specific time period. She just threw that number out there into the wind with no context.
And the thing is, whatever we're saving on generics doesn't seem to be enough anyway. Health insurance premiums are going up in this country in part because the cost of drugs is so high.
Business Insider's Bob Byran broke it down why out of pocket costs for healthcare are going up this way:
One explanation for this is that increasing drug prices and costs from medical suppliers have gotten so bad that employers finally decided to share the price hikes with workers. Additionally, there is some evidence that people tend to be more cautious with their healthcare spending in general when they have a high-deductible plan, even for nondeductible costs, so employers are trying to slow the total spending.
In short: The question shouldn't be how much we're saving on generic drugs, it should be why aren't we saving enough to keep costs from exploding? Apparently that $180 billion effort from Mylan is not up to the task.
EpiPen, by the way, is a branded product, so it had no hand in Mylan's "savings to the US healthcare system." It also makes up just under 10% of the company's revenue, according to Bresch's testimony. Of course, she didn't bring exact figures with her as Congress requested, so that's just a ballpark figure.
Lots of wild figures flying around here.
- US buys 81 Soviet-era combat aircraft from Russia's ally costing on average less than $20,000 each, report says
- 2 states where home prices are falling because there are too many houses and not enough buyers
- A couple accidentally shipped their cat in an Amazon return package. It arrived safely 6 days later, hundreds of miles away.
- Foreign tourist arrivals in India will cross pre-pandemic level in 2024
- Upcoming smartphones launching in India in May 2024
- Markets rebound in early trade amid global rally, buying in ICICI Bank and Reliance
- Women in Leadership
- Rupee declines 5 paise to 83.43 against US dollar in early trade
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market