NYC comptroller rips Mylan for EpiPen price hike
City Comptroller Scott Stringer read the riot act Thursday to pharmaceutical manufacturing giant Mylan for what he described as out-of-control executive pay and price gouging on its allergy fighting drug EpiPen.
Stringer, who manages the city’s five pension funds that own more than a million shares of Mylan stock worth $45 million, sent a letter to the company demanding corporate governance reform to boost oversight and accountability.
The five city unions that help run the pension funds — including the United Federation of Teachers — signed off on the Stringer letter.
“The EpiPen debacle appears to be the costly consequence of weak board oversight of management decisions that prioritize short-term profit at the expense of long-term value creation,” Stringer said in the three-page leader to Dougas Leech, chair of Mylan’s nominating and governance committees.
The price of a two-pack of EpiPen shot up from $100 in 2007 to $600 today, igniting a public backlash.
Meanwhile the compensation of Mylan CEO Heather Bresch skyrocketed from $2.45 million in 2007 to $18.9 million today — a 671 percent increase.
Stringer noted that the comptroller’s office and the city pension funds have “consistently opposed the company’s pay practices, voting against its pay plan at the past four annual meetings.”
He also said it’s time to replace company lackeys on its oversight board and replace them with independent board members to bolster accountability.
“Mylan’s gross mismanagement of its EpiPen pricing strategy exacerbates the company’s protracted history of weak board oversight, which has prompted both widespread investor concerns and repeated opposition votes and shareowner proposals by the NYC Funds,” Stringer said.
“Mylan faces a critical juncture,” the comptroller added, noting the public backlash and outrage in Congress over the company’s “astronomical price increases” for a life-saving product.
He noted the company’s stock dropped 10 percent in the last month and badly trails the performance of other Big Pharma stocks.
Mylan released a statement in response:
“Mylan’s Board is comprised of highly qualified, experienced and diverse individuals, including 10 independent directors. The Board has been actively engaged in overseeing the execution of Mylan’s growth strategy over the past decade – a strategy which has brought hundreds of products to the market, saving patients and the U.S. healthcare system hundreds of millions of dollars; grown our business globally; and expanded access to high quality medicines to patients around the world, all while delivering significant value for Mylan’s shareholders and other stakeholders.”