How do you know bad corporate behavior? Not very difficult if you care to look.
It's usually has a healthy mix of arrogance. Couple that with some insensitivity, greed and, as an article in this week's issue of Barron's points out, "executive tone deafness."
If only there were an emergency injection for executive tone-deafness.
Drugmaker Mylan (ticker: MYL), apparently unaware of the ongoing backlash against price gouging on vital medicines, raised the price of its EpiPen by 15% in May. That was two months after we recommended its battered shares (“Hurt by Valeant, Mylan Stock Could Rise 30%,” March 5) and only seven months after a previous 15% EpiPen price hike, which was rolled out immediately after a competing drug was pulled from the market.
EpiPen provides an emergency dose of adrenaline to those who can die from allergic reactions to things like peanuts and bee stings. Such allergies are on the rise. So is the list price of a two-pack of EpiPens, having jumped more than 500% to about $600 since Mylan acquired the drug in 2007. The latest hike stung more than earlier ones because drug plans have been raising co-payments, and patients have been switching to high-deductible plans with lower premiums but higher out-of-pocket costs.
This past week, just in time for EpiPen buying season as kids head back to school, the media and lawmakers have heaped scorn on Mylan.
“No one’s more frustrated than me,” Mylan CEO Heather Bresch told CNBC Thursday. But some people might be more frustrated—for example, anyone whose yearly pay hasn’t climbed 600% since 2007 to nearly $19 million last year, as Bresch’s did, on the back of all those EpiPen price hikes.
What to do with the stock? We liked it at $45. Now, at $43, we’re less enamored of it.
There's political overtones here. Big time. As we noted in a previous article. There's a global crisis afoot here. And as Dante said: the hottest places in hell are preserved for those who remain neutral in such times. You decide.
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