America is the only developed nation that lets drugmakers set their own prices on life-saving medications. One of the great things about this liberty-maximizing approach is that it gives pharmaceutical entrepreneurs the incentive to innovate.
And few entrepreneurs have done more to disrupt the provision of life-saving drugs than Mylan CEO Heather Bresch. In 2007, Bresch added EpiPen to Mylan’s portfolio. At that time, the emergency epinephrine-injector pens sold at an average wholesale price of $57.
Now, EpiPens aren’t a new, sexy drug. They’ve been around for more than four decades. And, traditionally, drugmakers have been reluctant to drastically raise the price of the penlike devices because so many American children rely on EpiPens to protect against fatal allergic reactions.
But where less daring executives saw an obstacle, Bresch saw an opportunity: If some people rely on EpiPens just to survive, surely they’d be willing to pay more to access them. After all, isn’t $57 a disgustingly low price to put on the value of a human life?
In 2008 and 2009, Mylan raised the price of EpiPens by 5 percent. At the end of 2009, Mylan jacked up the price by 19 percent. The company continued raising the price by 10 percent a year through 2013. Finally, from the fourth quarter of that year through the second quarter of this one, Mylan raised EpiPen prices by 15 percent every other quarter.
And so, over the course of nine years, Bresch gradually brought the price of EpiPens in line with their true worth. To do that, she thought outside the box and made sure to use every tool at her disposal — including her familial connections on Capitol Hill. In 2012 and 2013, Mylan spent $4 million lobbying Congress to pass the 2013 School Access to Emergency Epinephrine Act, which encouraged schools across the country to stock up on her product. The act was passed by the House and Senate (where Bresch’s father, Joe Manchin, works) and was signed into law by President Obama.
In total, Bresch raised the price of EpiPens by over 400 percent, to an average wholesale value of $317.82. That helped Mylan triple its stock price, from $13.29 in 2007 to $47.59 in 2016.
But that’s not all: Bresch also found time to disrupt her company’s tax burden by officially “relocating” it to the low-tax Netherlands, even as the company maintains most of its offices in Pittsburgh.
By itself, that record would make Bresch a great entrepreneur. But what makes her a true hero is what she chose to do with her company’s increased profitability. You see, for Bresch, making it easier for poor kids to die from allergy attacks is about something a lot bigger than herself. That’s why she chose to take a huge bite out of America’s gender pay gap by increasing her own salary from $2,453,456 in 2007 to $18,931,068 in 2016 — an increase of 671 percent!
Still, as impressive as Bresch’s accomplishments are, it’s important to remember that they’re only possible because of the system we all created together. And if that doesn’t make you proud to be American, then maybe you should “relocate” to the Netherlands, too!