bureaucracybusters

BRINGING JUSTICE TO CEOs (CORRUPT EGOTISTICAL OLIGARCHS): PART ONE (OF TWO)

In Bureaucracy, Business, History, Law, Law Enforcement, Medical, Politics, Social commentary on August 29, 2016 at 1:04 am

More than 500 years ago, Niccolo Machiavelli, the father of modern politics, delivered this sage advice in his political masterwork, The Discourses:

All those who have written upon civil institutions demonstrate…that whoever desires to found a state and give it laws, must start with assuming that all men are bad and ever ready to display their vicious nature, whenever they may find occasion for it. 

If their evil disposition remains concealed for a time, it must be attributed to some unknown reason; and we must assume that it lacked occasion to show itself.  But time, which has been said to be the father of all truth, does not fail to bring it to light.  

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Niccolo Machiavelli

Unfortunately, it’s advice that members of the United States Congress have blissfully chosen to ignore. And, in doing so, they have condemned millions of Americans to suffering and death at the hands of greed-based, predatory corporations.  

One of these corporations is Mylan Pharmaceuticals.  

In 2007, Mylan acquired the patent for the EpiPen, a lifesaving device for anyone allergic to common foods like peanuts, shellfish and eggs. Millions of people with life-threatening allergies depend on the EpiPen for survival.  

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During an allergy attack, the EpiPen injects an emergency dosage of epinephrine to the user, preventing a possibly fatal reaction, known as anaphylaxis, from occurring. 

Between 2007 and 2015, the wholesale price of an EpiPen skyrocketed from $56.64 to $317.82–an increase of 461%. 

According to NBC News, compensation for Mylan CEO Heather Bresch similarly skyrocketed during the same period: From $2,453,456 in 2007 to $18,931,068 in 2015–a 671% raise in eight years. 

Bresch wasn’t the only one to profit at the expense of the most vulnerable. 

Mylan’s president, Rajiv Malik, got an 11% pay increase to $1 million annually by 2015.  And Mylan Chief Commercial Officer Anthony Mauro got a 13.6% raise, amounting to $625,000 per year. 

Between 2007 and 2015, Mylan’s stock price tripled, going from $13.29 per share in 2007 to a high of $47.59 in 2016. By late August, 2016, Mylan’s stock is hovering around $45.68 per share on the NASDAQ index.

Bloomberg states that the EpiPen now accounts for about 40% of Mylan’s profits. 

Ironically, Sheldon Kaplan, the man who invented the now-famous device, never made a dime off it, and died in obscurity.  

After working at NASA, Kaplan worked for Survival Technology, Inc., in Bethesda, Maryland. His assignment: Create a device to quickly inject a victim of anaphylaxis–a potentially fatal allergic reaction–with an emergency dose of epinephrine. 

In 1973, when Kaplan was finalizing the design concept for what would ultimately become the EpiPen, the Defense Department asked him to take on a new assignment. The military needed a device that could quickly inject an antidote for nerve gas.

Kaplan’s design perfectly fitted this need: When a victim plunged a needle into his thigh, a spring-loaded mechanism shot a needle containing life-saving medicine into his bloodstream. 

Kaplan’s invention became known as the ComboPen, and was initially used by the Pentagon before becoming available for use by the general public several years later as the EpiPen. 

Kaplan left Survival Technology shortly after creating the ComboPen to become a biochemical engineer. He didn’t follow the success of his invention–and didn’t reap any of the huge financial rewards that it has produced.  

That has certainly not been true for Mylan Pharmaceuticals.

After cornering the patent on the EpiPen in 2007, the company has made billions on the life-saving device. 

According to Bloomberg, a package of two EpiPens costs $415 in the United States after insurance discounts. The same package in France–which has price controls under socialized medicine–costs $85.  

The chief beneficiary of this legalized price-gouging has been Mylan’s CEO, Heather Bresch.

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Heather Bresch

The daughter of U..S. Senator Joseph Manchin (D-WV), she joined Mylan in 1992 and held various positions within the company.  Among these: Its chief lobbyist before Congress.  

It was in that capacity that she persuaded Congress to enact a bill requiring all public schools to carry EpiPens for students with food allergies. It was signed into law by President Barack Obama in November, 2013.

Over the next three years, schools nationwide bought EpiPens by the truckload. And Mylan jacked up its prices for the EpiPen every other quarter. 

On January 1, 2012, Heather Bresch became Mylan’s CEO.

But it wasn’t enough to have a monopoly on a device millions of men, women and children desperately needed. In 2014, true to its “profits-at-any-price” philosophy, Mylan reincorporated in the Netherlands to lower its effective tax rate.

It did so through a corporate accounting trick known as a tax inversion, and thus claiming the status of a foreign-owned corporation although its headquarters remained in Canonsburg, Pennsylvania.

Even her own father, U..S. Senator Joseph Manchin, condemned Mylan’s use of the inversion scheme and said it should be illegal.  

But Bresch fiercely defended it in an interview with the New York Times: “You can’t maintain competitiveness by staying at a competitive disadvantage. I mean you just can’t.”

No doubt, with her $18 million-a-year CEO salary and moneyed ties to high-powered attorneys and influential members of Congress, Bresch thinks herself invulnerable.

But all that could quickly change–if even a small number of her victims become angry enough.  

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