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Clinton Expected To Hit Wells Fargo In Speech On ‘Bad Corporate Actors’

Clinton Expected To Hit Wells Fargo In Speech On ‘Bad Corporate Actors’

 

WHITE PLAINS, N.Y. (Reuters) – U.S. presidential candidate Hillary Clinton on Monday will unveil a plan to make it easier for consumers to take legal action against “bad corporate actors,” citing Wells Fargo & Co and Mylan Pharmaceuticals, according to a campaign official.

While campaigning in Ohio, the Democratic nominee will explain how she would, if elected on Nov. 8, curb the prevalence of contractual clauses that require consumers, employees and other individuals to resolve legal disputes in private arbitration proceedings instead of in courts, her campaign said. Mandatory arbitration clauses sometimes require that claims be pursued on an individual basis instead of on behalf of a class of similarly situated individuals. Consumer advocates say this makes it prohibitively expensive to take legal action.

Clinton will call on the U.S. Congress to give agencies such as the Federal Trade Commission, the Federal Communications Commission and the Department of Labor the authority to restrict the use of arbitration clauses in consumer, employment and antitrust agreements, according to a preliminary plan reviewed by Reuters.

Clinton will also discuss how she believes that the Consumer Financial Protection Bureau and other agencies already have the authority to curb the use of such clauses under the 2010 Dodd-Frank Act. The planning document said she would urge the Securities and Exchange Commission to exercise its authority to make related rules authorized by the financial reform law. Wells Fargo is expected to be in the crosshairs when Clinton discusses how she would curb mandatory arbitration clauses.

For years, the bank’s employees opened as many as 2 million checking, savings and credit card accounts without the customers’ permission in order to meet sales quotas. Wells Fargo reached a $190 million settlement with federal regulators earlier this month.

When Wells Fargo chief John Stumpf testified before Congress recently about the unauthorized accounts, he said he did not expect the bank to waive a clause signed by its customers in order to open their authorized accounts. The clause said they would arbitrate disputes instead of suing Wells Fargo in court.

Democratic lawmakers in Congress, including Senator Elizabeth Warren of Massachusetts, have called on Wells Fargo to toss out the mandatory arbitration clause and allow customers to sue.

Clinton is also expected to criticize Mylan for sharply raising without justification the price of EpiPens, which deliver life-saving drugs to those with allergies. The criticism will be part of a larger push to curb excessive market concentration and encourage competition that benefits consumers, her campaign said.

(Editing by Lisa Von Ahn)

IMAGE: Democratic presidential nominee Hillary Clinton boards her campaign plane in Charlotte, North Carolina, United States October 2, 2016.  REUTERS/Brian Snyder

Could Innovative California Lower Drug Prices For Everyone?

California may soon drive a hole through Washington’s tolerance for — and protection of — price gouging on drugs. A measure on the November ballot, Proposition 61, would bar state agencies from paying more for prescription drugs than the U.S. Department of Veterans Affairs does.

Congress generally prohibits the U.S. government from negotiating prescription drug prices. The VA is an exception. Federal law ensures that it obtains a discount of at least 24 percent off a drug’s list price.

Other countries don’t let drugmakers abuse their citizenry with rapacious pricing. But the U.S. Congress does the drug industry’s bidding, defending business practices that bilk patients, taxpayers and anyone who buys health coverage.

That’s why Mylan got away with hiking the EpiPen price (for Americans) by 500 percent. It’s how Turing Pharmaceuticals could raise the price of a drug used by AIDS patients by some 5,000 percent.

California seems to be fighting back. As a buyer of drugs for about 4.5 million public workers, university employees and others, the state has market muscle. It can refuse to pay indecent price markups. (Prop 61 would not affect Californians on private plans.)

The pharmaceutical industry has amassed $100 million to defeat the measure. Practiced in the art of extortionate pricing, drug companies know how to wield a threat: They could refuse to sell their products to the state of California, depriving millions of needed medications.

But would that happen? I asked economist Uwe Reinhardt, the Princeton expert on health care. He thinks it unlikely.

As long as drug companies can make a profit on an already developed drug, they’re going to sell it. After all, they still make money on the drugs they sell to Canada and Europe at considerably lower prices. Other countries confront drug companies with take-it-or-leave-it propositions, and the companies relent.

We Americans, Reinhardt says, “seem haunted by the theory that unless we allow drug companies to charge us whatever they wish for a pill, innovation will stop. And we fall for that story.”

If Prop 61 became a reality, other state governments would not sit back and continue paying prices well above those charged California. So we have to consider the other scenario — that the drug companies decline to sell to California at VA prices. They would give up a large chunk of the California market but keep the price game going in the rest of the country.

Reinhardt doubts they would play this kind of hardball. Abandoning an entire market would destroy any goodwill they have with doctors and patients. The value of their company name, an intangible asset, could fall, spilling over into other things they sell. Thus, a drug company board member might think twice before authorizing that level of aggression.

Polls find 66 percent of California voters in favor of Prop 61. AARP and the AIDS Healthcare Foundation support the measure. Opponents include some patient advocate groups, fearing that the state’s refusal to pay up might limit their access to drugs. The industry, of course, is fanning those fears.

America’s drug pricing scandal reflects an odd imbalance in what we expect of fellow citizens. Our soldiers risk life and limb fighting terrorist regimes, but we seem unable to ask drug company executives to trim a few million off their exorbitant compensation for the good of the country.

Reinhardt asks, “Is it really essential to compensate the top five layers of executives of drug companies with boats and planes and villas in Tuscany to get these folks to innovate in drug therapy?” The answer is no.

It may take America’s innovator, California, to put an end to the drug pricing scam. Californians, do your duty.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached atfharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators webpage at www.creators.com.

How Can A CEO Feel Good About Being Vile?

How Can A CEO Feel Good About Being Vile?

Corporate price gouging is never nice. But gouging people on the price of medicines they rely on to stay alive is worse than not nice — it’s predaceously evil.

And if you think corporate morality can’t go lower than that, how about gouging people on the price of a life-saving medicine in order to jack up the personal pay of a drug maker’s CEO? That’s the bottom level of grotesque immorality where Heather Bresch dwells. She is chief executive of Mylan, a pharmaceutical profiteer that markets the EpiPen medical device, which literally is a lifesaver for people who suffer deadly anaphylaxis allergy attacks.

These allergy attacks kill nearly 200 people a year in the U.S. alone. Within seconds, something as common as peanuts or a bee sting can cause sever rash, swelling of the airways, drops in blood pressure, shock, and if not treated right away, death. So, naturally, we would want to increase access to the life-saving medicine that prevents these attacks, right?

Increasing that access is hard to do at today’s price. For years, a two-shot packet of EpiPens cost under $100, but Mylan bought the rights to the injectable drug in 2007, gained monopoly control of the market, and in 2012 suddenly began sticking dependent patients again and again with drastic price hikes. Now, the two-pack averages more than $600, with some paying above $900!

Drug makers routinely claim they must charge high prices to recoup their cost of developing their products — but Mylan didn’t develop the EpiPen, taxpayers did. The original research was initiated by the Pentagon back in 1973. Today, the device and the medicine in it cost Mylan only a few dollars to produce, and the product itself is essentially unchanged from when Mylan bought it. So the company’s only real contribution to the EpiPen has been to raise its price by more than 600 percent — a shameful act of sheer profiteering that rips off hundreds of thousands of users and endangers the lives of those families who simply can’t afford it.

Mylan’s CEO, the one responsible for this price gouge, regards herself as a self-made corporate success story — a woman who came out of hard-scrabble West Virginia and scrambled to the top of the food chain at Mylan. “There is a work ethic and grit about [West Virginia] that allows me to help make a difference,” Bresch told the New York Times.

Well, yes, grit, hard work — and having the advantage of being the daughter of the state’s former governor and current US Senator, Joe Manchin III. Take the MBA degree she got from West Virginia University, an academic credential bestowed on her 10 years after she left the school, having completed only about half of the coursework required to get a degree. The state university later conceded that Bresch was awarded this business degree… well, because her father was governor at the time, overseeing the school’s budget. It’s this sort of ethical “grit” that Mylan’s chief exec has employed to pick the pockets of thousands of vulnerable customers who rely on EpiPen.

Heather’s greed has sparked a furious public backlash, leading to congressional investigations. But, again, her “grit” might pay off, for she has bought off several top allergy-patient advocacy groups who are not backing the people. Why? Because she’s been dispensing millions of dollars to them in PR grants, making them “allies” in her blatant price-gouging scheme.

One thing that has risen higher than EpiPen’s price: CEO Heather Bresch’s paycheck. It’s up by 671 percent since 2007, and last year alone she pocketed $18.9 million! But I wonder — is that enough to make her feel good about being so vile? Of Course, Congress and the courts will do nothing to deter her and the other Big Pharma gougers — but surely the lowest level of Dante’s Inferno has rooms reserved for all of them.

Why Mylan’s Alleged Solution To Its EpiPen Price-Gouging Scandal Is A Scam

Why Mylan’s Alleged Solution To Its EpiPen Price-Gouging Scandal Is A Scam

Published with permission from AlterNet.

The pharmaceutical giant Mylan has a public uproar on its hands over its 500 percent price increase for a life-saving device known as EpiPen, which delivers emergency shots of the hormone epinephrine to treat potentially deadly anaphylaxis.

In response to the Martin Shkreli-style PR disaster, the company announced Thursday it has devised a supposed solution to the prohibitively high costs of the essential medicine. According to a statement from the corporation, the company plans to “further enhance access to EpiPen” by establishing a discount card and patient assistant system. Here’s how it’s described:

The company is reducing the patient cost of EpiPen® Auto-Injector through the use of a savings card which will cover up to $300 for their EpiPen 2-Pak®. For patients who were previously paying the full amount of the company’s list price for EpiPen®, this effectively reduces their out-of-pocket cost exposure by 50%. Mylan also is doubling the eligibility for its patient assistance program, which will eliminate out-of-pocket costs for uninsured and under-insured patients and families as well.

However, there is a key problem. The reform will not change the base-level cost of EpiPen for consumers. Since Mylan acquired EpiPen from Merck KGaA in 2007, it has hiked the price from $93.88 to $608.61. Under the company’s new plan, the dramatic price increase will not be reversed.

The high price is exacerbated by the fact that EpiPens generally have to be replaced annually, due to expiration.

Robert Weissman, the president of the corporate watchdog organization Public Citizen, was not impressed by the company’s supposed solution. “If the company wants to calm public outrage over its contemptible and unconscionable price spikes for EpiPens, there’s only one course of action: actually lower the price,” he said in a statement released Thursday.

“Coupons, discount cards and patient assistance programs are a false solution for consumers hit with gigantic out-of-pocket costs,” Weissman continued. “First, many consumers will not use the coupons or the programs. Second, many consumers with high deductibles or no insurance will still need to pay far too much for EpiPens—$300 for a set of two—a problem made worse by the facts that many families purchase multiple sets of EpiPens and that EpiPens must be replaced every year.”

Ida Hellander, director of health policy and programs at Physicians for a National Health Program, told AlterNet that she agrees.

“This is not a solution at all,” said Hellander. “Pharmaceutical companies do this for a lot of products. They say that if anyone needs help, we will provide assistance. But they make the guidelines about who can be helped and under what circumstances. And there are so many hoops to jump through that it is a totally inadequate, false solution.”

“The real solution,” said Hellander, “is that they need to drop the price dramatically, but of course they are not going to do that because they are having record profits, and that is their goal. Voluntarily they are not going to do anything. This is another reason we need a single-payer health system where we can negotiate prices with drug companies.”

In Canada, where pharmaceutical prices are subject to regulation by the Patent Medicine Prices Review Board, EpiPen sells for just over $100 per device, distributed by Pfizer Canada via a license from Mylan. According to Weissman, even $100 per pen is “an excessively high price, but at least within the bounds of reasonability.”

EpiPens are commonly used by people with life-threatening allergies, with nearly 4 million prescriptions written last year alone. The spike in prices is forcing people living with allergies, as well as EMTs and other first responders, to resort to more affordable manual syringes—a development that doctors warn presents public health dangers, including an increased risk of the wrong dosage.

Meanwhile, according to Hellander, “you see people hanging on to old EpiPens, not getting new ones when they expire or not having them at all.”

While the price of EpiPen has climbed dramatically, this spike has been outpaced by the salaries of top executives. Heather Bresch, the CEO of Mylan, saw her compensation jump 671 percent from 2007 to 2015.

Sarah Lazare is a staff writer for AlterNet. A former staff writer for Common Dreams, she coedited the book About Face: Military Resisters Turn Against War. Follow her on Twitter at @sarahlazare.

Photo: EpiPen auto-injection epinephrine pens manufactured by Mylan NV pharmaceutical company for use by severe allergy sufferers are seen in Washington, U.S. August 24, 2016.  REUTERS/Jim Bourg