Amid a turbulent year and falling revenues, Mylan faces more flak for raising CEO’s salary

By PharmaCompass

2019-03-07

Impressions: 112 Article

Mylan NV has been facing a tumultuous year — in November 2018, the US Food and Drug Administration (FDA) issued a warning letter to its manufacturing site in Morgantown, West Virginia (US), and the EU suspended its valsartan certificate of suitability to the monograph of the European Pharmacopeia (CEP) for Mylan’s facility in Hyderabad, India. This is after it faced much flak for raising the price of its life-saving epinephrine auto-injector EpiPen in 2016.

Last week, the generic drug major faced even more criticism — this time for giving a raise to its CEO Heather Bresch. This information was known once Mylan announced disappointing results for yet another quarter, along with a rather dismal forecast for the year ahead.

Mylan increased Bresch’s salary by more than 15 percent to US$ 1.5 million and extended her contract through April 21, 2024, according to a document filed with the Securities and Exchange Commission last week. She’s also eligible for a target annual bonus of US$ 2.25 million.

The company has been grappling with a turbulent generic-drug market, wherein prices have been falling amid regulatory pressure to bring more competing products on the US market. With the introduction of generics, North American sales of EpiPen continue to slide.

President Rajiv Malik, who faces civil lawsuits accusing him of taking part in an alleged price-fixing scheme, saw his base salary increase 15 percent to US$ 1.15 million and his contract extended through 2022.

Generic drug makers are facing headwinds as the FDA has also expedited its drug approval process, thereby impacting the prices of existing drugs. Mylan’s total revenue of US$ 3.1 billion was down 5 percent year-on-year (YoY). Similarly, Teva experienced a fourth quarter revenue decline of 16 percent YoY.

Meanwhile, Mylan’s EpiPen manufacturing partner — Pfizer — received a request from the US Attorney for Southern District of New York to provide documents as part of a probe into quality control issues at Meridian Medical Technologies for a failure to investigate “serious” problems associated with an unspecified number of patient deaths. In 2017, Pfizer’s Meridian unit (that manufactures EpiPens for Mylan) had received a warning letter from the FDA, in which the agency said Meridian had failed to thoroughly investigate product failures, including EpiPen products that were associated with patient deaths and severe illnesses.

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