Mylan Urged by NYC Pension Fund to Name Independent ChairmanBy
Comptroller criticizes ‘gross mismanagement’ of EpiPen prices
Letter to board member seeks oversight of pricing decisions
The New York City official in charge of protecting the city’s pension funds for teachers, firefighters, police and city employees wants Mylan NV to name an independent chairman, saying the recent controversy over the price of the EpiPen allergy shot is an example of the board’s failure to oversee risk.
“Mylan’s gross mismanagement of its EpiPen pricing strategy exacerbates the company’s protracted history of weak board oversight,” New York City Comptroller Scott Stringer said in a letter Thursday to Mylan director Douglas Leech, who chairs the nominating and governance committee. The city’s pension funds, which own 1.1 million Mylan shares valued at about $45 million, has had longstanding concerns with Mylan’s board and compensation practices, Stringer said.
Stringer’s strongly worded letter -- in which he expressed “alarm” with EpiPen’s “exorbitant price hikes” -- adds to the storm of consumer outrage and investigations requested by lawmakers from both parties. Chief Executive Officer Heather Bresch’s attempts to quell the criticism by introducing financial-assistance programs to help cover EpiPen’s costs and a generic version at half the price fell short.
Mylan spokeswoman Nina Devlin, in a statement, pointed out that Mylan has 10 independent directors.
“The Board has been actively engaged in overseeing the execution of Mylan’s growth strategy over the past decade -- a strategy which has brought hundreds of products to the market, saving patients and the U.S. health-care system hundreds of millions of dollars,” she said.
Stringer, in his letter, cited Bresch’s “excessive” compensation as a reason why more oversight is needed. She was awarded about $19 million last year, according to data compiled by Bloomberg, while Executive Chairman Robert Coury got $18 million.
Stringer also asked Leech to assign the board oversight of pricing strategies and removing non-independent directors from the audit committee, as well as the nominating and governance committee.