Mylan EpiPen Price Increases 550% in Nine Years, CEO Heather Bresch Testifies Before Congress

In August 2016, Mylan CEO Heather Bresch faced intense scrutiny when it was revealed that EpiPen prices had increased from approximately $103 in 2007 to over $608 by 2016—a nearly 550% price increase for a life-saving allergy treatment. The scandal exposed pharmaceutical price gouging, the failure of regulatory oversight, and the role of political connections in protecting corporate profits while millions of Americans faced unaffordable costs for essential emergency medication.

The Price Increases: From Affordable to Unaffordable

EpiPen two-packs, which deliver emergency doses of epinephrine to treat severe allergic reactions (anaphylaxis), experienced dramatic price escalation under Mylan’s ownership:

• 2007: $103.50 for a two-pack
• 2009: $103.50 (no increase initially)
• 2016: $608.61 (nearly 550% increase from 2009, 488% from 2007)

For the 3.6 million Americans who fill EpiPen prescriptions annually, many of them children with severe allergies, these increases created impossible choices: pay hundreds of dollars for medication that expires after one year, or risk death from allergic reactions.

Families often needed multiple EpiPens—one for home, one for school, one for the parent’s workplace—multiplying costs to over $1,800 annually for basic protection against potentially fatal allergic reactions.

Congressional Testimony: Defending the Indefensible

On September 21, 2016, Heather Bresch testified before the House Committee on Oversight and Government Reform. Her defense of the price increases revealed the pharmaceutical industry’s approach to justifying price gouging:

Profit Margins: Bresch claimed that for each $608 two-pack, Mylan received only $274, with the remaining $334 going to other players in the supply chain including pharmacy benefit managers (PBMs), wholesalers, and retailers. This argument attempted to deflect blame while obscuring that Mylan controlled the wholesale price that drove the entire cost structure.

R&D Justification: Bresch testified that price increases partially funded research and development to improve the drug. However, EpiPen’s core technology (epinephrine auto-injection) had not changed significantly, and the drug itself (epinephrine) was a century-old generic medication. The “improvements” were minor design changes that did not justify 550% price increases.

System Criticism: Bresch claimed “no one’s more frustrated than me” about the pricing controversy, blaming the healthcare system’s complexity rather than Mylan’s pricing decisions. This deflection ignored that Mylan had full control over the wholesale acquisition cost that determined final prices.

Executive Compensation: Profiting From Price Gouging

While Bresch claimed frustration about high prices, her personal compensation told a different story:

• 2007: $2.5 million in total compensation
• 2015: $18.9 million in total compensation (657% increase)

Bresch’s compensation increased more than seven-fold over the same period that EpiPen prices increased five-fold. The timing was not coincidental—executive bonuses and stock options were directly tied to revenue and profit growth, creating incentives to maximize prices regardless of patient impact.

Congressional representatives highlighted this hypocrisy during testimony, noting that Bresch personally profited by nearly $19 million in a single year while families struggled to afford her company’s product.

Regulatory Capture: FDA Favors and Generic Barriers

Mylan benefited from multiple forms of regulatory capture that protected its EpiPen monopoly:

FDA Generic Approval Delays: Despite EpiPen being a relatively simple drug delivery device for a generic medication, the FDA took years to approve competing generic auto-injectors. Teva Pharmaceuticals’ generic EpiPen application faced repeated delays and was not approved until 2018—more than two years after the pricing scandal erupted.

Classification Advantages: The FDA classified EpiPen as a drug-device combination product requiring extensive testing that created high barriers for generic competition. This classification protected Mylan’s market dominance despite the medication itself being a low-cost generic.

User Fee Dependence: The FDA’s reliance on pharmaceutical company user fees through PDUFA created incentives to accommodate industry preferences, including slower generic approvals that protected branded product profits.

Political Connections: The Manchin Factor

Heather Bresch’s father, Joe Manchin, served as West Virginia’s governor (2005-2010) and U.S. Senator (2010-present), raising questions about political influence:

Medicaid Mandate: While Manchin was West Virginia’s governor, the state implemented a policy encouraging schools to stock EpiPens, creating guaranteed demand for Mylan’s product. Similar policies spread to other states, driven by Mylan’s lobbying efforts.

Congressional Access: Bresch’s family connections may have facilitated access to key Congressional committees overseeing pharmaceutical regulation, though no direct evidence of improper influence emerged from investigations.

Industry-Friendly Legislation: Senator Manchin consistently opposed pharmaceutical price control legislation, aligning with industry positions while his daughter led a major pharmaceutical company.

Mylan’s Response: Authorized Generic at “Half Price”

Facing public backlash, Mylan announced it would release an “authorized generic” version at approximately $300 per two-pack—still triple the 2007 price and presented as a “solution” while maintaining inflated profit margins.

This response exemplified pharmaceutical industry tactics:

• Present a smaller price decrease as generosity while maintaining huge markups
• Retain two product lines to maximize revenue from both price-sensitive and price-insensitive customers
• Avoid any admission of wrongdoing or commitment to fair pricing

The “authorized generic” allowed Mylan to claim responsiveness to public concerns while preserving most of its price gouging profits.

Market Failures and Monopoly Power

The EpiPen scandal demonstrated how pharmaceutical monopolies operate:

No Real Competition: Despite epinephrine being a generic drug costing pennies to produce, Mylan faced no effective competition for auto-injector delivery devices due to FDA regulatory barriers and patent protections on the device mechanism.

Captive Market: Patients experiencing anaphylaxis will die without treatment within minutes. This creates perfectly inelastic demand—patients (or their insurers) will pay any price rather than risk death, giving manufacturers unlimited pricing power.

Pharmacy Benefit Manager Complicity: PBMs negotiated “rebates” with Mylan in exchange for favorable formulary placement, but these rebates were not passed to consumers. PBMs profited from high list prices while patients faced escalating out-of-pocket costs.

Insurance Impact: Spreading Costs to All Americans

While insured patients might not pay the full $608 price, the cost was distributed across the insurance system:

Rising Premiums: Insurance companies passed pharmaceutical costs to all members through higher premiums, making all Americans subsidize Mylan’s price increases.

Higher Deductibles: As drug costs rose, insurers increased deductibles, meaning more patients paid full price until meeting their deductible thresholds.

Formulary Restrictions: Some insurers responded by removing EpiPen from preferred formularies or requiring extensive prior authorization, creating access barriers and treatment delays for emergency medication.

International Price Comparisons: American Exceptionalism in Gouging

The same EpiPen sold for vastly lower prices in other countries:

• United Kingdom: Approximately $69 for a two-pack
• Canada: Approximately $120 for a two-pack
• France: Approximately $85 for a two-pack
• United States: $608 for a two-pack

These international comparisons demonstrated that high U.S. prices resulted from regulatory and policy choices, not production costs or market forces. Other developed nations implemented price controls or negotiated pricing that prevented the exploitation American patients faced.

Schools and Public Health: Rationing Life-Saving Medicine

The price increases had severe public health consequences:

School Budget Strain: Many schools required multiple EpiPens for students with allergies but faced budget constraints that forced rationing decisions. Some schools maintained inadequate supplies, placing allergic children at risk.

Summer Camps and Activities: Youth programs struggled to afford EpiPens for participants, limiting activities available to children with allergies or forcing families to provide expensive medication the camps couldn’t afford.

Low-Income Families: Uninsured and underinsured families often went without EpiPens, with some parents resorting to expired devices or sharing prescriptions—dangerous practices born of economic desperation.

Lobbying and Legislative Capture

Mylan’s pricing power was protected by extensive lobbying:

Federal Lobbying: Mylan spent millions annually lobbying Congress against pharmaceutical price regulation, including proposals to allow Medicare to negotiate drug prices.

State Legislation: Mylan lobbied state legislatures to pass laws requiring schools to stock epinephrine auto-injectors, creating guaranteed demand for their products while portraying the effort as public health advocacy.

PAC Contributions: Mylan’s political action committee contributed to members of congressional health committees, creating conflicts of interest that prevented aggressive oversight.

The Settlement: Misclassification, Not Price Gouging

In 2016, Mylan reached a $465 million settlement with the Department of Justice for misclassifying EpiPen under the Medicaid Drug Rebate Program. By classifying EpiPen as a generic rather than branded drug, Mylan paid smaller rebates to Medicaid, effectively overcharging the government program.

However, this settlement addressed narrow accounting fraud, not the fundamental price gouging. Mylan paid the settlement without admitting wrongdoing and continued selling EpiPens at inflated prices. No executives faced criminal charges.

Systemic Failure: Outrage Without Reform

The EpiPen scandal generated massive media coverage and congressional hearings but produced minimal policy changes:

No Price Regulation: Congress did not grant any agency authority to regulate or limit pharmaceutical price increases.

No Generic Reforms: The FDA did not significantly streamline generic approval processes for drug-device combinations.

No PBM Oversight: Pharmacy benefit managers’ role in pharmaceutical pricing remained largely unregulated.

No Import Allowance: Proposals to allow importation of lower-priced EpiPens from other countries failed due to pharmaceutical industry opposition.

Precedent for Continued Abuse

Like the Daraprim scandal before it, the EpiPen controversy established that pharmaceutical companies can implement extreme price increases on essential, life-saving medications with minimal consequences:

• Public outrage produces congressional theater but no legislation
• Regulatory agencies lack authority to intervene
• Financial settlements are minor compared to profits extracted
• No executives face criminal prosecution
• Companies implement token price reductions while maintaining inflated baseline prices

Competing Products and Continued Monopoly

Generic competitors eventually entered the market, but Mylan maintained dominance:

Teva Generic: Finally approved in 2018, but faced manufacturing problems and supply shortages.

Adrenaclick: An alternative auto-injector existed but faced formulary barriers and lacked brand recognition.

Auvi-Q: Briefly competed but was recalled in 2015 due to dosing concerns, then relaunched with limited market access.

These competitors never achieved sufficient market share to force meaningful price reductions, demonstrating that regulatory barriers and market power allowed Mylan to sustain inflated pricing despite competition attempts.

Heather Bresch’s Defense: Blaming the System

Throughout the controversy, Bresch positioned herself as a victim of the complex healthcare system rather than an architect of price gouging:

• Blamed PBMs for high patient costs while Mylan set the wholesale price
• Claimed R&D costs justified increases for a century-old drug
• Portrayed Mylan as a responsible company while implementing 550% price increases
• Expressed “frustration” while accepting $19 million in annual compensation

This deflection strategy became standard practice for pharmaceutical executives: acknowledge system problems while denying personal responsibility and continuing extractive pricing practices.

Broader Pattern: Pharmaceutical Industry Standard Practice

The EpiPen scandal was not aberrant—it exemplified standard pharmaceutical industry practices:

• Acquire established drugs and implement dramatic price increases
• Exploit regulatory barriers that prevent generic competition
• Use lobbying to prevent price regulation
• Claim R&D costs justify increases for old drugs
• Implement token reductions when facing political pressure
• Ensure no executive faces criminal prosecution

The Cost of Regulatory Capture

The EpiPen case demonstrated the human cost of pharmaceutical industry regulatory capture:

• Millions of Americans rationed or went without life-saving emergency medication
• Families faced financial strain or bankruptcy from necessary medical supplies
• Schools and public institutions struggled to maintain adequate emergency supplies
• Public health was subordinated to corporate profit maximization
• Political and regulatory systems proved incapable of protecting citizens from predatory pricing

A functioning regulatory system would have prevented these price increases, expedited generic competition, or imposed price controls. Instead, regulatory capture ensured Mylan could exploit its monopoly position for maximum profit extraction while patients, families, and public institutions absorbed the costs.

The congressional hearing generated headlines but changed nothing—a theatrical performance of accountability that concealed the reality of pharmaceutical industry control over the political and regulatory systems meant to constrain it.