Disgraced Ex-Pharma CEO Martin Shereki Injects Himself Into Epipen PR Meltdown

Shkreli — who famously insulted members of Congress earlier this year but refused to testify officially over his own decision to increase the price of a life-saving pill — is now hopping at the chance to defend generic drug manufacturer Mylan.

He may even have opened the door to testify before the House Committee on Oversight and Government Reform, where he previously cited his Fifth Amendment's right to avoid incriminating himself.

"Any chance i can come through this time and actually testify?" he tweeted Thursday in a post directed at the committee's Democrats.

All of this now paves an unlikely new friendship between Shkreli and Mylan CEO Heather Bresch.

 One price-gouging scandal too many in Big Pharma will eventually make the public see isolated scapegoats as the status quo. When business as usual looks broken, big changes are ahead.
Heather Bresch created about $15 billion in value for Mylan in the seven years since she stepped up as president of the company. A big part of that value add came from her talent for repackaging off-the-shelf drugs into bona fide blockbusters. In the last two days outrage over her financial wizardry has cost the healthcare industry somewhere between $80 billion and $85 billion in destroyed stock market capitalization. We haven’t seen carnage like this in pharma land since Martin Shkreli became the most hated drug boss on the planet last year. That particular PR disaster crystallized in a terse Tweet from Hillary Clinton as well. Three months later, speculation that a new Clinton presidency would negotiate draconian drug price caps had destroyed 30% of all shareholder wealth in the biotech group alone and contributed to the worst broad-market correction in years. This time around, the clock is ticking a lot faster. We’ll know the next occupant of the White House 90 days from now. If that person is Hillary, Big Pharma is officially on notice. And she’s comfortably ahead in just about all the polls. The drug makers can bury their heads and pretend this goes away. They can distance themselves from Heather Bresch like they did with Martin Shkreli last year. They can always lobby hard to keep Hillary out of the White House. That’s going to look really good. Or they can take a page from the brokerage industry and admit that the regulatory landscape has changed, so they need to evolve in response. Margins are unsustainable in a world where Mylan can charge domestic buyers $300 per packaged dose of epinephrine and gray-market alternatives are available for a quarter of the price. I know the autoinjector delivery system is a sleek and beautiful thing, but we’re not buying a sports car or high-performance computer here. We’re buying an emergency dose. A bare-bones stick, 10 cents worth of hormone and $200 of obligatory training is all it takes. Under Bresch, Mylan refined the Epipen stick to the point where they can admit with a straight face that it costs them $150 to make. They’re only earning a 55% profit here. It’s just that in actual dollars that profit has swollen to triple what Merck used to charge before Mylan bought it back in 2007. Again, that’s part of Bresch’s genius. She marketed the hell out of the stick, ran glossy commercials, got the health authorities to mandate its inclusion in emergency kits and the public to think that the company somehow had an exclusive franchise on bee sting relief. The company is selling more sticks than ever, maybe 3 million of them every year. I don’t have statistics offhand on how many expire unused and need to be replaced in 12 months, because it doesn’t really matter. Heather Bresch engineered a world where nobody with access to $300 ever needs to die of allergic shock ever again. Even after the last few days, that’s been a very good thing for Mylan shareholders. Martin Shkreli approves. He’s all about the quick profit. Of course his cheerful “thumbs up” is poison these days. As for me, my world is already $80 billion poorer as the industry runs for cover. I remember the August 2015 crash extremely well because I had to cancel a dentist appointment in order to play market triage. Shameful to say, I never found time to make that appointment. My teeth have held up. Wall Street kept turning. The public forgot why they hated Martin Shkreli like some kind of wrestling bad guy. The election kept inching closer. Now Hillary Clinton remembers that bit about drug pricing because there’s been another scandal too politically useful to ignore. One Martin Shkreli is easy to turn into a lone monster. When Big Pharma gives him a sidekick it starts to look really bad. Does America need $300 emergency allergy sticks? Granted, the system picks up the cost, but when our system is so overburdened and other countries survive with old-fashioned needles, it’s an honest question. Heather Bresch built a beautiful product around 10 cents of drug, maybe $5 in plastic and an idiot-proof delivery system. The bells and whistles alone apparently cost Mylan $145 per dose. My grandmother carried a bee kit around for close to a century before the Epipen came along. So far, so good. Mylan didn’t do anything illegal. Shkreli’s problems aren’t really related to his pricing patterns. But sometimes the profit margin just tilts across the sustainability line and we ensure that the people who have to clean up after us have a harder time. Regulations tighten after the unspoken rules break down. I know a lot of drug developers are agonizingly close to transformative success on orphan diseases, genetic therapies, cures for the rarest genetic conditions that will literally require millions of dollars per dose to ever pay back the investors. All the furor over Mylan endangers all that progress by raising the prospect that those therapies will never make economic sense. Shut them down. Let the developers run out of cash. That’s what the market is telling me now. Too many biotech start-ups were chasing miracles anyway. Any whisper of price caps lowers the number that will ever make it across the finish line. The smart ones, run by talent like the people running Mylan -- nominally a low-cost generic purveyor, don’t forget -- will sell out and shut down fastest. And this is especially sad because Heather Bresch has done beautiful things for the generics industry. She’s improved global manufacturing quality, fought for a Medicare prescription benefit and gotten pills into the mouths of millions. A little more of that simple medicine and a little less innovation around 10 cents worth of hormone would probably have saved us all tens of billions of dollars and probably some lives down the road. That’s all it takes. Because price rollbacks now are too little and too late.   Posted by:  The Wealthy Doctor http://wealthy-doctor.com/epipen-pr-meltdown-gives-martin-shkreli-a-new-friend/


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