The current controversy over the price of the EpiPen, manufactured by Mylan, Inc. is quite instructive with respect to the nature of capitalism.
Mylan’s CEO, Heather Bresch, is the daughter of United States Senator Joe Manchin, himself a scion of a notable political family in my home state of West Virginia. Bresch was given her entry-level job at Mylan on the recommendation of her father, who was then West Virginia’s Secretary of State. I’m sure he was just listed on the bottom of the resume and Mylan called him and that he in no way reached out to a company that had operations regulated by the State of West Virginia in order to put a word in for his daughter.
Bresch rose through Mylan’s ranks astonishingly quickly. Perhaps due to her MBA degree from West Virginia University. A degree, it should be noted, which she did not earn. Indeed, it was bogusly awarded and then rescinded because it was revealed that then-president of WVU, Michael Garrison, gave it to her despite the fact that she had completed less than half of the coursework required for the degree. Garrison, it should be noted, is a family friend of the Manchins and business associate of Bresch’s.
Don’t you think for a moment that justice wasn’t done in that case, however. Garrison was forced out of office due to the Bresch degree scandal and is now forced to practice law. He recently represented a company which sued to get a municipal law rescinded which prevented it from operating a horizontal hydraulic fracking drill adjacent to the city’s water supply.
All of that aside, Bresch has long led Mylan to great profits and a soaring stock price which, to be clear, is the job of a CEO. Those profits and that stock price, however, are due mostly to the combination of the monopoly Mylan has on the EpiPen and Bresch’s total lack of compunction about using that monopoly to jack up the price of the pen, which is a literal life-saving device. Hey, even bogus MBA holders can grok the concept of inelastic demand. If you can’t understand that, go read a book, dudes.
Unfortunately, bogus and real MBA holders alike, while masters of certain economic concepts, have a hard time grasping other economic concepts. Such as the one that holds that “there is no such thing as a free lunch:”
“Mylan noted in an email to Business Insider that about 80% of people with commercial insurance who also used a “My EpiPen Savings Card” received the device for $0.”
See? They’re not gouging all of their patients. Just the ones without insurance, which our capitalist society has decided is a privilege, not a right. If you HAVE insurance it’s free! Unless of course you count how much your premiums are jacked up due to insurers passing along the costs they are being charged by Mylan and their counterparts for this kind of gouging.
Now that all of this is emerging into a national controversy, Bresch is being attacked for the price of the EpiPen and because of the 600%+ raise she gave herself after raising the price. She is being defended by her peers, however, as someone who is merely following the accepted norms of capitalism:
That’s quite an endorsement coming from Mr. Shkreli. Not that he’s at all wrong about the values and nature of capitalism. Indeed, he knows them quite well.
Oh well. I suspect all of this will blow over soon. In some cases this kind of controversy would turn into a show-hearing before Congress, but given that that Bresch is a Senator’s daughter I doubt that will happen. And even if it does, I suspect nothing further will happen because Mylan and Bresch are doing everything by the capitalist book.
Even if most people don’t always realize or acknowledge that, in a capitalist society, favoritism, privilege, fraud, greed and the shielding from, as opposed to the engaging in, competition is the book.