PR Crisis Management Lessons from Mylan’s EpiPen Pricing Controversy

Mylan’s EpiPen controversy offers lessons in PR and social media crisis management. Mylan Pharmaceuticals faced a firestorm of criticism from patients, politicians and the media when it increased the price of its EpiPen to $600, a 400% increase over the last seven years. It increased the price 15% in the fourth quarter of 2015, and then by another 15% earlier this year. In addition, changes in insurance co-pays meant many patients had to pay more out of pocket for EpiPen.

EpiPen is a potentially life-saving treatment used in the event of a severe allergic reaction, also called anaphylaxis. Because of recent rulings by the Food & Drug Administration (FDA), EpiPen has little competition. EpiPens expire in one year. The price increase took place in advance of the school year, the time when parents purchase the treatment to store with nurses in their children’s schools.

Social Media Stimulates Uproar

The EpiPen pricing controversy shows the power of social media. An online petition gathered more than 80,000 signatures in just 45 days and prompted more than 121,000 letters to Congress. “It just felt nefarious,” said Mellini Kantayya, a Brooklyn actress who started the petition, told The New York Times. Kantayya, whose husband uses EpiPens for an allergic condition, shared the petition with her 836 Facebook friends to start the drive.

Social media listening could have alerted Mylan to an emerging crisis – and enabled the company to react before criticism escalated and mainstream media reported the story. 

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Media outlets soon noted the social media uproar. Congressmen demanded an explanation and called for an investigation. In response to the growing PR crisis, the company first defended the price increase in order to increase profits. Later the company announced it would offer copay assistance to more customers and a $300 savings card to help cover the out-of-pocket cost.

The Mylan response to the uproar shows that half measures do not assuage critics. Patients and their supporters continued to denounce Mylan on social media.

“This step seems like a PR fix more than a real remedy, masking an exorbitant and callous price hike. This baby step should be followed by actual robust action,” Connecticut Senator Richard Blumenthal stated in a press release. The senator called for an across the board price cut, not merely a reduction for a selective few with time to “navigate a bureaucratic labyrinth of discounts.”

Most recently, the company said it will offer a generic EpiPen for $300, half its regular list price. Consumer groups were unswayed. They insisted on an overall price reduction and questioned why the generic product was not introduced earlier, the New York Times reported.

What PR Pros Say

PR professionals pointed out what they thought Mylan should have done.

“The best way to manage the crisis is to mitigate the damage and get in front it,” said John McDonald, founder of crisis communications firm Caeli Communications. “The best way they can do that is to significantly roll back the cost, admit it was a mistake to increase it, and engage the medical community.”

Ray Hennessey, chief innovation officer at JConnelly, expressed support for Mylar’s PR crisis management strategy. Rather than countering the attacks directly, Mylan CEO Heather attempted to shift blame to the Affordable Care Act, insurance companies, and pharmacy benefit managers.

“That’s smart, since it is difficult to fight the popular opinion that all companies — and drug makers in particular — are more about profitability than patient outcomes,” Hennessy writes in Entrepreneur.

Changing the Narrative

In media interviews, Mylan CEO Heather Bresch explained the impact of middlemen and high-deductible insurance plans. “Changing the narrative is the first step to any effective crisis response, and there are enough bad guys to go around when it comes to the costs in our health care system,” Hennessey says. “Bresch should double down on that approach and start leading the national conversation more, rather than drowning in politically charged criticism.”

From our vantage point, the PR and marketing mistake was not considering and evaluating public and patient opinion in advance of announcing the price increase. Public uproar and Congressional hearings in recent months over other large price increases by Valeant Pharmaceuticals and Turing Pharmaceuticals should have alerted Mylan to the likelihood of a public outcry over yet another large price increase for EpiPen.

Announcing a price increase is not the best method to discover what price the market will not bear. Too much damage can result. Finding a higher price that doesn’t prompt customers to revolt should be determined through quiet market research in advance. In Mylan’s case, a modest price increase would probably have produced better financial results than what is now coming to pass with the large increase and resulting public uproar. With a less controversial price increase, their brand reputation and patient loyalty, now in tatters, would likely have remained unchanged.

Bottom Line: PR experts debate Mylan’s PR crisis management response to criticisms over its EpiPen price increases. While some say the Mylan failed to notice the emerging crisis on social media and “get in front of” the crisis, others credit the company for trying to change the narrative.

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Other Article of Interest

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