Mylan CEO: Health Care System Broken; Mylan Under Fire for 400 Percent EpiPen Price Hike; Mylan Leads Health Care Decline; European Markets Fall on Drug Woes
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. When a U.S. Senator demands an inquiry into the price of a life-saving drug. This EpiPen, will talk about this with Amy Klobuchar. We'll be live on this program. And will be remembering the queen of Paris. Legend designer Sonia Rykiel has died. Before we get to those stories allow me to update you, because this is CNN and on this network the news always comes first. At least 250 people are known to have died following Wednesday's 6.2 magnitude earthquake in Italy. Hundreds of people are injured. The rescue operations continue late into the night with reports of aftershocks in the town of Amatrice. A U.S. Navy boat has fired three warning shots at an Iranian vessel in the northern Persian Gulf. American officials say the Iranian boat was harassing the U.S. Navy craft and failed to stop even after flares had been fired. The American ship then fired the three warning shots into the water. After 50 years of fighting, Colombia's government and the FARC rebels have reached a deal. It took nearly four years of negotiations to come to this agreement, which must be approved by majority of Colombian voters. The referendum on this will be held in October. Hillary Clinton has accused her Republican rival Donald Trump of peddling right wing conspiracy theories. The Democratic nominee said Trump was being sinister in trying to appeal to extremists. Earlier Trump said, Hillary Clinton's email scandal was the most shocking since Watergate. Ryan Lochte will be summoned to appear in a Brazilian court. The Olympic swimmer faces accusations that he filed a false police report after he claimed to be robbed in Rio during the games. Brazilian police say Lochte is free to send a lawyer in his place. Look at this, this is the EpiPen. Those who suffer from allergies will be well familiar with its use -- well, maybe not familiar with his use, but certainly familiar with its design and intention if things go wrong. You basically stab yourself with it in the thigh. The chief executive of Mylan that makes it, is now describing a broken health care system that's to blame for the skyrocketing price of the EpiPen in the United States. Some 400 percent over the last couple of years. The drug companies under fire for raising the price of the injectable allergy medicine so much, so fast. A box of two EpiPens costs $600 in the United States. If you contrast that same medication in the United Kingdom, it's $120. You may well be saying, of course, nothing new about this, we could choose any medication, whether it be indigestion, antiretroviral or EpiPen, and you would see a higher price in the United States. Mylan has announced a discount program that would cut the price in half for some patients. That would still leave people around $300 for two EpiPens. And remember, they only last for a year. So you have to renew them. And many people will be renewing them at the beginning of the year when they're paying the full deductible on their insurance policies. U.S. Presidential candidate Hillary Clinton has tweeted, there is no justification for this hikes. The actress, Sarah Jessica Parker, whose son suffers from a nut allergy, says she will end a relationship with Mylan. She had a deal to promote the company's allergy drugs. Mylan's chief executive, Heather Bresch, says, "The pricing is out of our control." She called on congress to fix what they described as a broken system.</s>HEATHER BRESCH, CEO, MYLAN: Look, we are going to continue to run a business and we're going to continue to meet the supply and demand of what's out there. It's a complicated system. And to get in it and understand it takes time, which as you know, many people don't have the time to take the time. Our Congress, our leaders in this country need to get around the table and fix this.</s>QUEST: We're very grateful that joining us is the U.S. Senator from Minnesota, whose daughter also suffers from allergies and realizes on an EpiPen. Senator, thank you. Do you have any sympathy, Senator, which this idea or this view that it is the system that's broken and it's the system that's responsible for such a sharp increase in price?</s>AMY KLOBUCHAR, U.S. SENATE DEMOCRAT, MINNESOTA: Well, I would like to see systemic changes. But to be very clear, this is the first program I've been on that has had the audacity to lead with the fact that the prices for the very same product are so much cheaper in other countries. You see the same thing in Canada. I actually have a bill with Republican Senator -- I'm a Democrat -- Republican Senator John McCain to allow for the re- importation of drugs from countries that have cheaper prices, but just as safe of products. And so do I think there's systemic solutions? Yes, including negotiations for drug prices with pharma for Medicare. Including stopping companies from colluding generics and big Pharma to stop products from getting on the market that would create competition. But do I think this company did a bad thing? Yes.</s>QUEST: But what you did they do that was bad? When you have the chief executive saying, listen, this is the market. This is what it costs. This is how we have to do business.</s>KLOBUCHAR: I'm sorry, but they were the company that had this product when it cost $100. It's not like they suddenly changed the product, they made some minor changes to it, but there is absolutely no way those costs of R&amp;D accounted to 500 percent increase on the product. There's no way you can explain why it would be selling cheaper in other countries. So in my mind they took a product that was a good product, is a good product, and then increased the price because they wanted to have more money and more profits. Their profit margin went up, Richard, from 2008 it was 9 percent. In 2014 their profit margin was 55 percent.</s>QUEST: Right, where men and women of the world on QUEST MEANS BUSINESS, Senator. What we're everything talking about here is price gouging, that's the name for it, isn't it?</s>KLOBUCHAR: Well, and unfortunately, under American laws, when a company has monopoly power -- I'm the ranking member on the antitrust subcommittee -- when a company has monopoly power and they price gouge, that in itself is not a violation of the antitrust laws. You have to show they colluded. That they signed contracts to keep competitors out of the market. Obviously, I've called for that investigation of the situation with the FTC.</s>QUEST: The problem is you'd have thought that since insurance companies pay much of the price for these drugs, and Medicare, Medicaid pays much of the price, but for-profit insurance companies surely should have a greater interest in lower cost of pharmaceuticals. Let's face it, Senator, we're talking about classic capitalism here. So why has classic capitalism failed?</s>KLOBUCHAR: I believe that you need the consumers empowered and the people empowered to see how much they're getting ripped off to get change. And ironically that's what's happening. Some of these high deductible plans, which many of us which we didn't have a plan like that, but OK, high deductible plans. They show the consumers how much these products have cost, are costing, and will cost. So that is creating pressure from individual Americans to start pushing, saying this is way too much money. And before it was just embedded in the system, hidden in the system. So I truly believe we need more generics for competition. And our laws allow for that, but it's been slowed down. And pharma has stopped bills that would make it easier to have more competition, foreign competition, as I pointed out, and then allowing negotiation. I don't think you can believe this, the harnessing nanergy of America's seniors, right now they have no ability to negotiate. The prices are set. The VA gets to negotiate, the veterans do, but not the seniors under Medicare. That would be a huge draw for bringing prices down.</s>QUEST: Senator, we're grateful that you've taken the time this evening in the busy election year, to come and talk to us. Thank you.</s>KLOBUCHAR: Well, it's great to be on.</s>QUEST: Thank you. Now, we'll talk more about this obviously in the months ahead. I still got my EpiPen in case things go a bit funny. I wonder whose it is. I've got to give it back to him, because they need it more than anybody else. Mylan's stock finished down nearly .75 percent. It was a little bit of an up tip there in the market, but down towards the end. Again, not big movements on the day. The market closed down in the red. Mylan led a decline in health care stocks and it all brought the whole market down. The Dow was off 33 points. In Europe, the controversy over Mylan dragged down pharma across the Atlantic. And you see that the FTSE fell as drug makers saw a fall in prices. Germany ifo survey says, business morale in the biggest economy deteriorated in August. And that's why you see the largest loss in the Xetra Dax. The queen the knitwear has passed away. Sonia Rykiel's fashion design, seen here in film, "Prot-.-porter," live on. And we will take a moment to remember the woman who changed French fashion with a sweater. QUEST MEANS BUSINESS, good evening.