The Epic EpiPen Crisis #Epigate

 

For those of you who do not know, the EpiPen is an epinephrine auto-injector. It tightens blood vessels to increase blood pressure, relaxes muscles and helps to reduce hives and swelling from possible allergic reactions. For some people carrying an EpiPen is their life line, which could make the difference between life and death. The EpiPen was made by a man named Shel Kaplan between 1965 to 1978. Currently a company called Mylan owns the rights to produce EpiPen.

Mylan introduced a recent price hike that not only outraged many, but made the crucial drug not available to some patients. NBC News stated the new price of the EpiPen was hiked up 400%, two EpiPens costing up to $600 (Popken, B., 2016).

According to CBS News there was recently a deal made between Pfizer and King pharmaceuticals. Pfizer bought rights from King to produce their own line of EpiPens and if you know anything about Pfizer they create many generic products; which would mean big competition for Mylan. Mylan blames their large price hike due to over a billion dollars invested into refining their product. Now not only are Mylans prices increased by 400% but their competitors are selling generic pens for less than a fraction of the price, less then $10 for two pens (Edwards, J., 2016).

In public relations there are phases to deal with crisis and crisis control. The four phases are proactive, strategic, reactive, and recovery (Wilcox, D., 2013). In times of crisis its important to be strategic. Being proactive and preventing crisis is definitely preferable, however if its too late then get a good strategy, be reactive, and then recover. When being proactive you have to asses the situation and identify the issue. In the strategic phase its about communication and management. Being reactive means, more communication to achieve resolution, and in recovery you finally achieve restoration of image and reputation.

Milan company, in effort to be proactive increased their prices by 400%, a decision which turned out to be poor on their behalf. The news of Pfizer buying rights to the auto-injector displayed immense competition for them and this resulted in the Mylan EpiPen crisis. They received critical responses from customers, lawmakers, and even celebrities. Mylan realizing that this could be bad for business had to strategize. They came upon a resolution and said they would make an effort to increase availability for customers and provide benefits programs, making it more affordable for customers. However the new benefits would not effect the new prices employers and insurance companies have to pay. A new “discount” a coupon released that would give up to $300 off to consumers. They also have adjusted their income level brackets so that a family who makes under a higher amount still qualify for price deductions and wont have to pay as much out of pocket.

Mylan’s EpiPens are still hundreds of dollars more than their generic competitors. Their efforts to console the situation, while a valid attempt, fell short of a true solution. Their solution reflects that typical of a large corporation. Their tactics seems to be based on shifting attention, either by placing blame on health care or focusing the attention on their competitors and drawing it away from price increase. The Wall Street Journal  reviews Mylans tactics to handle the situation stating “Mylan could improve its handling of the crisis by addressing the initial price increase directly and by shifting the focus from bland corporate language to more genuine-sounding personal statements by Chief Executive Heather Bresch. Another lesson is the background in executive photos can impact perceptions. Several outlets have illustrated articles about the price increase using a stock photo; Ms. Bresch seated on a chair, that might have been borrowed from the Palace of Versailles. A more conventional office chair might actually be more expensive but looks more appropriate.”(DiPietro, B 2016, p.3). This crisis stirred up so much dirt that they received their own hashtag.

Overall, the prices of Mylans Epipens remain sky high, their competitors released a more affordable generic version, and the situation is in a sense considered handled. However it could have been handled better on Mylans part. Crises like these occur throughout all industries and they will continue to happen, but its how they are handled that decide who the victors are at the end of the day, Mylan may be safe for now, but maybe not for long.

References

Bomey, N. (2016). EpiPen maker to offer discounts after price hike firestorm. Retrieved October 02, 2016, from http://www.usatoday.com/story/money/2016/08/25/epipen-maker-offer-discounts-after-firestorm/89329122/

DiPietro, B. (2016). Crisis of the Week: Mylan Battles EpiPen Price Hike Criticism. Retrieved October 02, 2016, from http://blogs.wsj.com/riskandcompliance/2016/09/06/crisis-of-the-week-mylan-battles-epipen-price-hike-criticism/

Edwards, J. (n.d.). In $3.6B King Deal, Pfizer Gets a Small but Important EpiPen Monopoly. Retrieved October 02, 2016, from http://www.cbsnews.com/news/in-36b-king-deal-pfizer-gets-a-small-but-important-epipen-monopoly/

Popken, B. (2016, September 30). Upgraded EpiPens torn apart. Tech firm: “It’s the same core device” Retrieved October 02, 2016, from http://www.nbcnews.com/business/consumer/mylan-says-it-upgraded-epipen-2009-so-experts-looked-inside-n652651

Seipel, T. (2016). EpiPen outrage: Silicon Valley engineers figure real cost to make lifesaving auto-injector two-pack — about $8. Retrieved October 02, 2016, from http://www.mercurynews.com/2016/10/01/epipen-outrage-silicon-valley-engineers-figure-true-cost-to-make-lifesaving-auto-injector-about-10/

Wilcox, D. l., Cameron, G. t., Reber, B. H., & Shin, J. (2013). Think Public Relations (2013th ed., pp. 171-173). N.p.: Pearson.

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