Skip to main content

tv   Public Affairs Events  CSPAN  December 29, 2016 10:00am-12:01pm EST

10:00 am
president-elect considers a plan that would allow military vitamins to opt out of the veterans administration health-care system. instead, the government would pay for veterans to seek private doctors they choose. "the new york times" reports that president-elect met with private hospital systems at his for the estate yesterday to discuss it. "wall street journal" reports veterans groups that opposed the plan, believing it would be a first step toward privatization and would reduce the quality of veterans health care over the long term. ♪ [applause] [trumpet] >> the presidential inauguration of donald trump is friday, generally 20th. c-span will have blood coverage of the day events and ceremonies. watch live on c-span and, msn live on the free c-span radio app.
10:01 am
over the next few hours on c-span, a look back at some of the congressional hearings of the past year. we start with the flint michigan want the contamination and testimony before the house oversight committee for michigan governor rick snyder. in the increasing cost of the fb pen, the anti-allergy shot, the ceo of the drug company that makes the epipen testified before congress on why they raised the price and about her own compensation. after that, look at wells fargo opening customer counts without the customer's knowledge. the ceo of wells fargo and before the senate banking committee. we will close with cable and satellite television company executives testifying before congress about billing problems. melissa burke covers congress
10:02 am
for the detroit news and joining us from capitol hill to talk .bout flint michigan water when was the water inflamed declared undrinkable and why? >> it dates back to april 2014, when the city under the direction of some state appointed emergency managers switched the water supply to the untreated flint river, and at right afterwards, knowing you something was wrong. the public did not find out about the lead in their water until fall of 2015. that is when advisories started it suggested residents get filtered water for their top or drink bottled water, particularly for kids with bottled water. >> when and how did congress get involved in the flint water issue? >> in 2015, there was a growing chorus. there was a realization that something had gone really wrong
10:03 am
inflamed and there was a lot of questions about what had happened, how it had happened, how it could happen, whose fault it was, whether the government, city, state, the feds -- who should have prevented this? and trying to figure out what they needed to do to make sure it did not happen again. >> there has been a number of hearings with the house oversight committee. how many hearings did they hold? >> in february and march, they had three hearings with all sorts of players and there was an additional hearing held by the energy and commerce committee under congressman fred upton held in april. >> but was the state of miss again -- what was the state of michigan asking from the federal government? >> governor rick snyder at that point had submitted a request to president obama for about 98 -- i believe $98 million worth of assistance
10:04 am
to respond to the crisis for things like bottled water, filters, also help the damaged water lines and pipes in the city. amidstalso supportive the congressional delegation, which was pushing for upwards of all $600 million worth of emergency aid from congress to help with infrastructure fixes, get those lead pipes out of the ground in flint. >> in a few moments, we will watch the third of the house oversight committee hearings. they were covered about the flint michigan water problem. who testifies in this particular hearing and what this commerce want to learn? >> the people testifying are administrator of the environmental protection agency, gina mccarthy, and the michigan governor rick snyder, who is a republican. of congressmembers
10:05 am
had a lot of questions for them. they wanted to know what went wrong, whose fault it was, why things were not taken care of earlier, by someone did not catch this earlier, why they did not listen to experts, my they were not hearing some of the early warnings from residents who were complaining about it, and the muddy looking water and smelly water? >> how does politics playing to the questioning of the witnesses? >> from the beginning, flint was -- unfortunately, it became a blame game. something you will hearing hearings is democrats are really state ofof the michigan, which is led by republican governor, and run by the republican majority legislature. they wanted to know again why the residents were not listen to come why the complaints were
10:06 am
dismissed, and lessen the outside experts who tried to sound the alarm early on were dismissed and not listen to two earlier on. republican side, they focused on the epa, administrator mccarthy. they said the epa had botched its oversight role and they should have stepped in a layer, when the state was not doing what it should have been doing, and they were also critical of the regulatory framework that the epa had, the rules that are lead inng levels of drinking water. those had not been updated in years and are due for revision. >> let's watch. here's part of the hearing from last march, beginning with questions from punishment matt kirk right of pennsylvania. >> thank you, mr. chairman. governor snyder, i'd like to ask you some simple questions, and i remind you that you are under oath today. first, i think you said this in
10:07 am
your testimony, but you do admit here today before this committee that you and your administration failed the people of flint. governor snyder: i have made that clear in terms of my state of the state address -- >> your own task force found that your own department of environmental quality was "primarily responsible for the crisis in flint." do you also admit that here today? governor snyder: yes. i took actions immediately based on the recommendations. >> your task force found that your officials at mdeq did not implement corrosion control, which "led directly to the contamination of the flint water system." do you admit that here today? governor snyder: uhm, the lack of corrosion control has led to this issue. >> and you admit that it was your officials at mdeq that did not implement corrosion control, which led to that, right?
10:08 am
governor snyder: they did not instruct the city of flint to do corrosion controls. >> is that a yes? governor snyder: again, they wouldn't be doing the corrosion controls. that's a city responsibility but they failed in what i deem would have been common sense to say they should have. >> governor snyder, do you admit that you personally received a letter on january 18, 2015, from flint's mayor, begging you to take action and warning "there is nothing more important in flint right now than fixing the water problems" on january 18, 2015, do you admit receiving that letter? governor snyder: i received a letter from the mayor dated that and took action on items within that letter. >> i'm asking you about january 18, 2015. this is exhibit d. governor snyder: yes. the lead with me so i can confirm that? >> would you hand him the letter, please, marked as exhibit d. we'll ask that this be made part of the record, mr. chairman. >> without objection, so ordered. >> january 18, 2015, from dwayne walling, the mayor, last
10:09 am
paragraph on the second page, it's directed to you specifically, and he says there is nothing more important in flint right now than fixing the water problems. do you see that? governor snyder: i do. >> do you admit getting that letter? governor snyder: yes. >> the mayor asked you repeatedly to come to flint during that crisis. do you admit today you didn't show up for more than seven months after he asked you? governor snyder: actually, i am not familiar. i'd have to check my schedule. >> that's what he says. you didn't go to flint until october 2015. is that right? governor snyder: i do not know if that's correct or not. >> you don't know. you admit here today to seeing headline after headline about health problems, hair loss, rashes, e. coli, bacteria, sewage, legionnaire's disease, did you read any of those stories, governor snyder? governor snyder: congressman, i read a number of those stories. what i would tell you is those stories we would follow up on them and continue to get reaffirmation from career bureaucrats that the water was safe. that was wrong. that was not correct information.
10:10 am
>> do you admit there were more cases of legionnaire's disease reported since the switch to flint river than "all the cases in the last five years or more combined?" do you admit that? governor snyder: yes, and that's why i provided a table that shows -- >> you do? governor snyder: a number of cases were at health care facilities, in terms of the numbers there were 87 cases -- >> you admit here today even after the whole world knew that flint residents were exposed to unimaginable levels of lead, you did not declare a state of emergency until january 2016? isn't that true? governor snyder: i took immediate action as soon as i learned there was a lead issue. we started issuing filters to people, doing water testing and blood testing. i wish more could have been done. >> plausible deniability only works when it's plausible and i'm not buying that you didn't know about any of this until october 2015. you were not in a medically induced coma for a year, and i've had about enough of your false contrition and your phony apologies.
10:11 am
susan hedmond from the epa bears not one-tenth of the responsibility of the state of michigan, and your administration, and she resigned and there you are, dripping with guilt, but drawing your paycheck, hiring lawyers at the expense of the people, and doing your dead-level best to spread accountability to others, and not being accountable. it's not appropriate. pretty soon we will have men who strike their wives saying, i'm sorry, dear, but there were failures at all levels. [laughter] people who put dollars over the fundamental safety of the. -- on the people do not belong in government and you need to resign, too, governor snyder. i yield back. >> the gentleman yields back. i recognize the gentleman from michigan, mr. amash, for five minutes. mr. amash: tur, mr. chairman. thank you, to minister to mccarthy, and i welcome you
10:12 am
governor snyder and thank you for your willingness to appear before this committee. governor, you spoke about the broken culture at many of the agencies in state government. how are you working to change the culture within the agencies , specifically the michigan department of environmental quality that were negligent or reckless and failed the citizens of flint? governor snyder: it began by changing leadership. i accepted the resignation of the department director, and put it in perspective, this was a department director that had served under two prior governors with distinction. but we had this issue. it was time to accept his resignation. i've essentially under civil service rules terminated the head of the water division that was one that made the terrible decisions with her team to say it should be two six-month studies instead of doing corrosion control. she was a 28-year veteran of the department. we're going to spend time, we are going to change this culture. bureaucratic culture that focuses on technical compliance
10:13 am
and doesn't have a sense of urgency, should not be serving our citizens. there are many good hard-working people that do work for the state of michigan. there are 47,000, but i am committed to finding the instances where these people haven't gotten the idea that we work for the citizens and i am going to be relentless in following up to make sure we make the changes necessary that this never happens again, whether it's in water area or any area of our state. mr. amash: governor, did state employees intentionally withhold information from you? governor snyder: i do not believe that was the case. what i would also say is we had a report from the office of auditor general that responded to senator ananek and i know you're familiar with the senator, that one of the conclusions was, i don't believe they found any willful misrepresentation. mr. amash: and what are you doing to make sure that state employees communicate with you , especially regarding issues of great importance like the people of flint?
10:14 am
governor snyder: i stood up in front of the entire state of michigan in my state of the state address and said these people that made these terrible decisions, that showed a clear lack of common sense failed us, but since they work for me, i am responsible for their actions. and i take that responsibility and i kick myself every single day about what i could have done to do more, but i told the people of michigan that there's a commitment, a passionate commitment to say we are going to change the culture in these places. i apologized to the people of flint. they deserve that. i understand why they're angry. it's terrible what they're having to go through, but i made a commitment to fix the problem. i can't take some damage that's been done as ranking member cummings said, but there's a lot we can do to help the people of flint address so many issues and i am absolutely committed to do that, and we are following through and getting that done. and i'm going back to flint tomorrow to roll up my sleeves and keep working that issue.
10:15 am
mr. mosh: governor, what -- -- mosh: governor, what h: governor, what is the state's expected budget surplus and how much of that money will be spent on helping the people of flint? governor snyder: in terms of i presented the budget in february for the state, in terms of surplus, we're actually going through two or three steps. i've asked for a total, including two supplementals or three supplementals that have already been passed by a total of $232 million to help address issues in flint, covering all areas, from the water system and infrastructure to nutrition, to health, to well-being, to economic development, all these fields to do whatever we can possible in terms of improving things in flint. several of these already passed our legislature. in addition, i ask for $165 million that would have been a rainy day fund deposit to go into a state infrastructure fund to say this is not an issue just for flint, but let's start putting aside the long-term resources to say we have an infrastructure problem in the state of michigan that's a national problem. let's get these lead pipes out of the ground, let's look at
10:16 am
setting the right standards, that's why i called the federal lead and copper rule dumb and dangerous. it is. in michigan i'm making a commitment, i will be proposing legislation, i will be pushing to do everything to put a much more stringent standard in because the people of our state and our country deserve better. -- better than they're getting today. mr. amash: i have a question for administrator mccarthy. if susan hedmond had not resigned, would you have fired her? administrator mccarthy: that was an issue i didn't need to face, sir, as you know. susan took the choice to submit. -- choice to submit her resignation knowing people would question whether or not she accepted some type of guilt or responsibility for this. she fully accepted responsibility and resigned. i accepted that resignation. i thought it was the right step for her to take. mr. amash: so the question remains though would you have fired her?
10:17 am
administrator mccarthy: i didn't have to face that decision, sir. mr. amash: i yield back. >> the gentleman's time expired. we recognize the gentlewoman from the district of columbia, ms. norton for five minutes. >> thank you mr. chairman, i very much appreciate this hearing and i appreciate both of you coming. since we started the hearings, it is amazing. we had gotten information that probably dozens of communities are facing the same thing, and they are coming forward and saying that they have been safe drinking water and high levels of lead in their kids are being poisoned. governor, you did take some action and some people have been fired, correct? governor snyder: correct. had,guess the floodwater
10:18 am
nt i guess the fli loggerhead, you fired several others, correct? governor snyder: correct. >> and you say many should the blame, including yourself, correct? governor sandoval and correct. >> what disturbs me is, first of all, -- governor snyder: correct. >> what disturbs me is, administer the mccarthy, you had the compliance and authority under law, don't you? administrator mccarthy: yes, sir. >> and was fired or held accountable and epa? was anyone fired? administrator mccarthy: no, sir. >> what disturbs me, i checked to see who was in charge, she was underneath you ask the regional administrator, she was
10:19 am
getting vacation time bonuses, got the last one on may 28, while -- the regional administrator is getting vacation time bonuses while the kids are getting poisoned. she finally resigned herself. you never fired anyone. you have great people working at the epa. administrator mccarthy: thank you. >> mr. del toro to get the congressional gold medal. mrs. walker came to the local authorities and blew the whistle. we have the mayor in here. , sheold me in march 2015 read the mayor at the library and promised to do everything. she went to city hall on april 3 and nobeginning of april one would see her. she was put off and to day of
10:20 am
the hearing the other day, the mayor had never talked to her after that. this -- youi said are experienced. you had the epa. you can read el toro's report, incredibly accurate. this was dated in june and not a damn thing was done until really until january of this year. and i went back and asked mrs. walters, i said, when did they finally come in because the mayor and other epa administrator from the district we acted immediately -- they did not act, they gagged mr. del toro. did you ever see that report? administrator mccarthy: when did you see the report? >> did you see this report?
10:21 am
again, a high school student could take this report and determine that kids are getting poisoned. .e confirmed it he went in and tested everything, the pipes and the building, he looked at the lead did a thorough examination, and then he detailed all the things we have heard about with the counterfeiting of flint. violations going back, and you tell me you had the compliance authority, did you ever shut these programs down and go after them? administrator mccarthy: sir -- >> you did not. no one acted. i heard calls for resignation. i think you should be at the top of the list. governoadministrator mccarthy: mhmm. >> they failed at the local and state level and we feel that the federal level and who was in charge? the district head gets a vacation bonus, the kids get
10:22 am
lead poisoned and you are still in office. mr. chairman, i yield back. mccarthy: thanks for the opportunity to answer. >> you are welcome. >> did you have something you wanted to say? administrator mccarthy: i would think it is good, sir. on april 24,us prior to that, that there was no corrosion control treatment, reversing that what they told us was they did corrosion control in the system. we had already told mdeq that they had to require the city of flint to move ahead with corrosion control treatment. advance of the moment. >> finish. administrator mccarthy: and we consistently said the same adva. >> thing. that is the report on three homes in the same area because of the complexity of blood, we
10:23 am
did not and could not, have made a concerted judgment about whether it was a systemic problem. when we had the information, ,hen we received it from mdeq which was not until july 21, we talking, we are done we now know it is a systemic problem. you do it or we will do it. they said we will do it. since that point in time, mdeq slow walked everything they needed to do, that precluded us from being able to jump to the rescue. that is what happened. if people are worried about whether we find -- we silenced el guild el toro, -- miguel toro, he is one of the experts we rely on. is simple fact is that mdeq the one who told everyone he was a rogue employee, to discredit him, just as the mdeq was doing
10:24 am
as the governor's task force sent in trying to discredit anybody who said there was a problem with that drinking water system. we were misled, strong gone, and we cannot do our job effectively. >> mr. chairman, i just asked that mr. del toro's report into be included in the record at this point. thank you and i yield back. mr. chairman: you just do not get it. you still do not get it. we recognize the gentleman from virginia. >> thank you. i get it. we are trying to make sure that blame is shifted here. it is interesting. for committee that has practice alice in wonderland techniques with management -- but there had, so when there is a problem that opm, off with the head of opm come off with the head of the cio at opm come off with the head of the hantavirus come off with the head of lois lerner.
10:25 am
governor snyder, apparently my friends and other side of the aisle, want to mention your head is securely on your shoulders. snyder, do you believe in the philosophy of governing that says we ought to push responsibility and power to the lowest level we can and is close to the people as weekend? snyder: as a general rule, yes. mr. connolly: the citizens of your state rejected the emergency manager law you had advocated in a referendum, is that correct? governor snyder: correct. mr. connolly: six weeks later, you reintroduced legislature that was approved by the republican led legislature for a new emergency pa436, is that correct? governor snyder: there was a lot that took to account the concern of the citizens and that was passed by a legislator that
10:26 am
represents the people of michigan. mr. connolly: that allowed you and appoint an emergency manager to act for and in the place and stead of the government and the governing body and the opposite chief administrative officer of the local government, quote, unquote from the law. your questions: are generally. this was a term or there was failure in terms of safety management. mr. connolly: did you appoint an emergency manager? governor snyder: yes. mr. connolly: that means the mayor cannot exercise powers mr. hand-picked emergency manager let him, correct? governor snyder: initially, yes. mr. connolly: master, we travel to flint and conducted a transcribing to of the last emergency manager appointed, you appointed, gerald ambroise. you appointed, not miss
10:27 am
mccarthy. we asked if he considered the city council impotent during his tenure. his answer on the record was "absolutely." you know how many pages of edicts were issued by your appointed emergency managers in this tragic time period, governor? governor snyder: no, but let me respond to your comment. mr. connolly: hold on because let me show you. i have only five minutes. ladies and gentlemen, hold them up. these are the stacks of edicts issued by your emergency managers, not by the city council oakland. too you know how many of those with meaningful steps to protect the citizens of flint from lead? your appointees?governor snyder: no. mr. connelly: not one.
10:28 am
like the minute, governor. it is my five minutes. i wish i had 10 and in that would give you all the time in the world. this is the failure of what you advocated. there is no evidence, even after you were warned by the mayor of flint. they had problems than ebay due to come. you ignored him. we had no evidence of you traveling to flint for 7 -- the flint for seven months. seven months, governor. seven months. i am glad you are sorry no. i am glad you are taking action now. but it is a little bit late for fl whoseinn health hasi been compromised, for people whosent help and immunity systems are already compromised, for a city in america that is on its knees because of your emergency managers decision to save $4 million, now it will cost a lot more to clean up.
10:29 am
and the stain and taint that state government has put on this country in the form of flint will be a long time been erased. point, thet some buck stops at your office, governor, with your department of environmental quality that collapsed, with your emergency managers who are guilty of hubris, they knew better than the local elected officials of flint and they ignored the warning. that is your record, governor. i yield back. >> we recognize the gentleman from tennessee. >> thank you, mr. chairman. before i yield my time, i would respectfully ask administrative mccarthy to consider scrapping the waters of the u.s. role as
10:30 am
it is clear epa cannot currently handle the issues on its plate. i yield my time to the gentleman from michigan. -- ithink the gentleman think the gentleman from tennessee. on september 20 6, 2015, this mccarthy, you received in email from peter cravat, director the epa office of drinking water. the whole point of the email is to share market words, documentation of the flint drinking water problems. mr. edwards ends the email, asking that you pay to " immediately take decisive action on this issue to protect the public." they do read the september 25 email that included mark edwards request for action? administrative mccarthy: i did. >> dr. edwards is the mayor to this committee and the people of flint. do you know who mark edwards is? administrator mccarthy: yes. >> you have met?
10:31 am
administrator mccarthy: we have met. >> how long have you known? administrator mccarthy: we have a contract with them to do work with us now. >> do you believe he is an expert on water treatment and corrosion? mccarthy: i think he is an expert but i wouldn't knowledge the pay has a number. >> the edwards emailed his key thets at the end of documentation, documenting that there is no corrosion control treatment and that people cannot afford bottled water and mdeq insists the water is safe, and that they know of a child with elevated blood levels already. received and email documenting all of these problems on september 25, including the fact that children have elevated blood lead levels, why did you not until january 21, 2016? governor mccarthy: sir, you are
10:32 am
incorrect -- >> i'm not incorrect. you continue to not take responsibility, including writing articles about it. dr. edwards is an expert on the issue. understandof flint that he has been there. you did not even shop until february of this year. i remind the members on the other side of the aisle, many days,ends the this administrator of bpa, did not show up until february. dr. edwards said in testimony before this committee that susan , who you will not fire, you would not fire, you will not even given answer if you would, that admin's response was unacceptable and criminal. that is what mr. edwards said. please, tell the people of flint behind you and this committee like mark edwards is wrong. mccarthy edwards : is a good scientist, and i respect him. if you look at the timeline of
10:33 am
when we received that e-mail, you will find that the city and county health advisory about the flint water went out on the same day. you will find that october 1, they were noticed to have no drinking of that water without protection. you will find on october 2, the governor put out a 10 point plan. on october 3, the filters were being distributed. i cannot -- there is no switch i can turn on. rep. desjarlais: i am hearing nothing of your action on that, and you have the law on your side that says in any, any event of imminent danger or health risk, you have the responsibility to act. you wrote an op-ed. excuse me. i am not -- i will give you a chance. you wrote an op-ed in the "washington post," which stated the epa regional office was also provided with confusing, incomplete, and incorrect information. administrator mccarthy: yes. >> as a result, the epa staff members were unable to
10:34 am
understand the scope of the lead problem until more than a year after the switch to untreated water. did the epa confirm in early 2015 that flint's water pipes lacked corrosion control? administrator mccarthy: no, i did not know that. the staff were unaware of that. rep. walberg: they were unaware of that? administrator mccarthy: yes. in fact, they were told by mdeq -- rep. walberg: what about mr. del toro who was disciplined? administrator mccarthy: he was not. rep. walberg: yes he was. administrator mccarthy: ok. rep. walberg: that is a matter of record as well. administrator mccarthy: i am sorry, that is not. rep. walberg: dr. edward said some of the documents received from it epa, they were 90% redacted. dr. edwards waited 10 years, how is this acceptable from an expert? rep. chaffetz: gentleman's time is expired, but you maybe
10:35 am
answer. administrative mccarthy: i wanted to be all clear. the emergency order i issued in january was because of continued failure to address the issue. if there is anything i could have done, and switch i could turn on that would have precluded us, allowed us to go further than was already happening at that time, i would have pulled that switch. what we needed was exactly starting. were we late in getting it done? yes. are there consequences? absolutely. our regional administrator worked very hard to get mdeq to do their job and get these actions in place. so when you ask if i received an email on a given date, i did. the actions were moving, there was nothing else they could have ordered that would have made that move faster. i did issue an order in january, because even after all of this, the order that i issued was questioned by this state, by
10:36 am
mdeq, by the state. was that really, legally solid? up until today, they continue to drag their feet. rep. chaffetz: go ahead, governor. governor snyder: i am sorry mr. chairman, you can only take so much at some point. all i can do is go to the record. what i would suggest is that people look at three emails. there is an email going back to june 8, 2015 from jennifer crux from the epa as an agenda from michigan semiannual call. there is an email from july 21, 2015, from hyde, a briefing paper with the mdeq talking about the federal lead and copper role, including flint water. on september 10, 20 15, there is an female about the epa and mdq
10:37 am
working together. they were in regular dialogue. they were talking about how to do things together. when i read these things, i am ready to get sick. we needed urgency and action and they just keep on talking. it is not about fighting. they are just not getting the job done. we messed up in michigan to begin with by doing two studies instead of corrosion control. that fundamentally caused this problem. i have accepted responsibility for the people that worked for me, but it is something different to have this continuing dialogue to say it was solely us, this could have been stopped sooner if other people could have also spoken up. i kick myself that our people should have spoken up, i should have asked tougher questions, i should have done more. but to also say the epa just did not get the information? i just ask you to take the time and go look at those three emails, and that will clear the record up. rep. chaffetz: thank you. appreciate it. we now recognize the ranking member. rep. cummings: you have represented a department that you were unaware of disaster building in flint until october 2015.
10:38 am
let's talk about emails, governor snyder. i find it hard to believe that a crisis of this magnitude completely escaped your attention for so long. it is clear that your senior staff, people that report directly to you daily, where very aware of what was taking place in flint. october 12, 2014, one of your top advisers wrote an email to your chief of staff saying, as you know, there have been problems with the flint water quality since they left the wsve system, which was a decision by the emergency manager there. i think we should ask the emergency manager to consider coming back to the detroit system in full or in part as an interim solution to both the quality and other financial problems the current solution is causing. i see this as an urgent matter
10:39 am
to fix, and of the quote. governor, did your chief of staff, who i assume reported directly to you, your right hand man, did he tell you these concerns urgently needed to be fixed in october 2014? did he tell you that? gov. snyder: i don't recall. i recall during that time period, we had issues. we discussed about the color and odor of the water. there was also concern about e. coli. rep. cummings: ok, you said -- governor snyder: there were several issues, but none of them related to lead. rep. cummings: but there was a problem with the water. did you get the email? gov. snyder: i did not get that email. rep. cummings: i remind you you are under oath. governor snyder: to my knowledge i did not get that email. rep. cummings: i hear you. your stuff made the following statement -- "after all, if the as in general motors -- "if they refuse to use the water in their plant and our own agencies are warning people not
10:40 am
to drink it, the differential between what we now select and dwsd would bepay significant. we look stupid hiding behind some financial statement" did you talk to him about concerns in february 2015? gov. snyder: i can't recall, but we had continuing discussions but we had continuing dialogue about water issues, some were resolved on e. coli, and that pthm. the gm issue was a matter of chloride in the water. it was acceptable according to our experts, for human consumption. rep. cummings: although it was rusting away, brand-new, the water was rusting away brand-new parts at gm, but it was ok for human consumption? i do not think that was mr. arlene's facility, by the way. gov. snyder: ranking member cummings, these are the kind of red finds where i kick myself. i was getting advice -- rep. cummings: i want you to
10:41 am
finish your kick. on march 2, 2015, the chief of staff offered the following assessment about flint. quote, "it is tough for everyday people to listen about financial issues and water mumbo-jumbo when all they see is problems. if we procrastinate much longer in doing something direct, we will have real trouble." end of quote. governor, did your chief of staff, your right hand man, talk to you back in march? governor snyder: my chief of staff and i had ongoing discussions. i cannot recall a specific discussion in march, we had ongoing discussions. and he was right to raise concerns. we took actions including the maximum grant, $2 million grant earlier in the year to help flint with water infrastructure. we also were working on getting filters. rep. cummings: i am running out of time. and i want to be obedient to the time restraints. the next day, he complained about "the lack of empathy for the residents." end of quote. again, this is your right hand
10:42 am
man. and he specifically said, your dq director, dan wyatt, i really don't think people are getting the benefit of the doubt. now they are concerned, rightfully so, about the lead level studies they are receiving from the deq samples. these folks are scared and worried about the health impact, and they are basically getting blown off by us," end of quote. governor, did you talk to your chief of staff about those concerns? gov. snyder: i had continuing dialogues with my chief of staff and he went out and sought advice or expertise, from career bureaucrats not just in one department, but the department of environmental quality. the department of health and human services said they could not see an elevation in blood lead level band they are wrong. rep. cummings: there are two possibilities. either your chief of staff told you about the concerns and you
10:43 am
did nothing or he did not tell you and you are an absentee governor. i yield back. rep. chaffetz: i want to recognize myself for five minutes. governor, you have apologized, correct? gov. snyder: correct. rep. chaffetz: has anyone been fired? governor snyder: correct. rep. chaffetz: anyone dismissed or otherwise retired? gov. snyder: yes. rep. chaffetz: did the state of michigan do something wrong? gov. snyder: yes. rep. chaffetz: administrator mccarthy, did the epa do anything wrong? administrator mccarthy: i do not know if we did everything right. that is the challenge i am facing. rep. chaffetz: the challenge you are facing right now is my question. my question is, did the epa do anything wrong? ms. mccarthy: i think we could have been -- i would hope that we would have been more aggressive. i would hope we would have escalated this issue if we could have done absolutely anything to stand on a rooftop and scream about the challenges we are
10:44 am
having. rep. chaffetz: ok, so you're just not -- here is the fundamental difference. first of all, we have jurisdiction here in congress on the epa. i don't have jurisdiction on the governor. i have jurisdiction to call him up here, and republicans did call him up here, he volunteered to be here, and we are investigating this. this is the third hearing on this topic. but here is the fundamental difference. i hope you and everybody understands this. i see responsibility. i see people that are getting fired, i see changes. i see admissions that there was fundamental wrongs that happened in the organization, but then when i turned to the epa, has anyone been fired? that is a question. administrator mccarthy: no, sir. rep. chaffetz: has anyone been dismissed? administrator mccarthy: no, sir. rep. chaffetz: when the epa region five administrator there,
10:45 am
susan headman, the date you finally did take decisive action, when you were questioned about that, you said that her act of stepping down was courageous. ms. mccarthy: i did. rep. chaffetz: i'm going to ask you again. did the epa do anything wrong? administrator mccarthy: the epa worked very hard. let me make one thing -- rep. chaffetz: no, i have another question for you. no, hold on. did the -- mark edwards has testified here twice. he does not have a dog in this fight other than he wants good quality health for people, and he wants good, clean water. and he happens to know the science behind the water. on those two hearings, did mr. edwards say anything that you think was wrong, or maybe inaccurate? do you think mr. edwards is that -- said anything that was wrong or inaccurate in any of those testimonies? administrator mccarthy: i think he was not at all informed about what epa did.
10:46 am
i think he knows nothing about the law. which he rated the admits. he doesn't know how we are supposed to work in the system. he doesn't understand that the problem itself was a responsibility of the state. oversight was our responsibility. we took that seriously, and we conducted it. does that mean i don't have regrets, because i really would like -- rep. chaffetz: that is a whole different standard. that is cheap. yeah, we just got regrets. that is cheap. that is cheap. administrator mccarthy: you have to look at the way the law works. rep. chaffetz: yeah, you know what, and it failed. you failed. you said, quote, "if there is any, anything i could do, you -- any switch i could pull, had that under the law, and you did not do it. administrator mccarthy: no, sir, i did not have that under the law. rep. chaffetz: yes, you did. if there is imminent threat, you can pull that switch. administrator mccarthy: only if we also -- rep. chaffetz: administrator, you are wrong.
10:47 am
administrator mccarthy: there are two parts to that. you skipped the second. you need to have information to determine -- rep. chaffetz: why do we need an epa? i am asking the question. administrator mccarthy: ok. rep. chaffetz: yes, ok. february is when you first arrived on the scene and it was not until january of the next year that you actually did something. that is the fundamental problem. don't look around like you are mystified. that is what happened. miguel del toro showed up in february. you did not take action. you didn't. and you could have pulled that switch. administrator mccarthy: we consistently took action from that point forward. rep. chaffetz: there are a lot of people in this audience from flint. no one believes that you took action. you have those levers there. mark edwards from virginia tech, bless his heart -- know, just listen for a second -- had the opportunity. they have said things like we failed to get epa to take lead in the water risks seriously. another quote of his. and this is possible because the epa has effectively condoned cheating on the lead copper rule monitoring since 2006. he read your op-ed that you put
10:48 am
out that is one of the most offensive things i could possibly imagine. and he said about you, the epa administrator gina mccarthy, effectively absolves the epa of any wrongdoing or treating the flint disaster. if you want to do the courageous thing you said that susan did, then you should also resign. no one will believe you. -- no one will believe that you had the opportunity, the presence, you have the authority, the backing of the federal government, and you did not act when you have the chance. if you are going to do the courageous thing, you should also step down. >> that was about 40 minutes of the three and a half hour oversight committee. you can see all of it at melissa of the detroit news back with us again to talk about what has taken place since the hearing. has the water situation in flint improved? guest: there are some recent tests that are promising that show some improvement in the water, but those advisories we mentioned earlier about folks
10:49 am
still needing to use filters on their taps and drink bottled water, those are still in place. host: did the hearings that congress held lead to any specific legislation? guest: yes, there are two things i would mention. one is on the policy side. congress clarified that for the epa's role, in cases like this in the future, when the epa learns about lead contamination in drinking water and the state agency responsible for notifying the public has not done so, the epa does have the authority to step in and notify the public itself, which it did not do in this circumstance. the other change is, the approved in december $170 million in funding. $100 million of that will go in grant, expected to go in grants, to flint to help them repair their damaged water lines and pipes in the city.
10:50 am
get those out of the ground so cleaner water can start flowing. host: that bill you just referenced on december 8, the water project bill, did come to the house floor. it included money for flint, as you mentioned. here is representative dan kildee, who represents flint, michigan, making his last pitch. that's on the floor for that legislation. rep. kildee: and a city of 100,000 people, they still cannot drink their water. this is not a question of access to water. the water flowing through the pipes in flint has poisoned that city. 100,000 people. 9000 children under the age of six, affected permanently by high levels of lead delivered to them from their municipal water system caused by careless, thoughtless decisions based on an obsession with austerity by
10:51 am
the state government. and then they were told the water was safe to drink when that same state government knew it was not. now look, we know where we stand. no bill is perfect, this bill is far from perfect. many of the provisions in this legislation i disagree with. but i have been fighting for my hometown and have been told to wait and wait and wait, and the people of my community can wait no longer. drinking water is a basic human right and that should be a human right exercised by people everywhere, including the people of my hometown of flint. every day that passes, every week that passes, every month that passes, that flint does not get the relief they so deserve, is the day we do not get back, more people leave, more
10:52 am
businesses fail, the city gets more poor and poor and poor and incapable of moving forward, and that has to stop and it has to stop right now. it has to stop before this congress adjourns. we cannot count on the next congress to get this done. host: that was congressman dan kildee, whose district includes flint, michigan. the money for flint part of a larger water bill that congress approved and the president signed into law on december 16. melissa burke joining us again. a few days after the bill was approved, the chairman of the house oversight committee, jason chaffetz, close down the investigation into flint. why? guest: he issued two letters kind of summarizing his findings. he said the situation in flint was a result of failures at all levels of government. he singled out the state of
10:53 am
michigan, the department of environmental quality. he said there were serious problems there in terms of misleading the epa. he said there have been significant problems with the epa, which had dragged its feet and not acted for seven months before issuing an emergency order in january of this year, 2016. so, he also really came down on the epa for not having updated its lead and copper rule, which is outdated and has not been revised for a number of years. host: so if the congressional investigation is over for now, does that mean water problems in flint are fixed? guest: unfortunately not, no. residents continue to drink bottled water, use filters on their taps, and it will take many years for them to try to get the lead pipes out of the ground. it is a monumental task.
10:54 am
host: what is the latest news locally out of michigan on this issue? guest: while, there was an ongoing investigation at the attorney general's office which so far has resulted in criminal charges against 13 government employees, including four that were just announced this week. two of those individuals were former emergency managers of the city who had been appointed by governor snyder. host: you can read melissa burke at thanks very much for joining us. guest: thank you. host: and a reminder, if you would like to watch the full three and a half hour hearing on the water problems in flint, michigan, you can go to our website, >> back in august, there were headlines about the epipen, the shot people take, mostly kids, when they have an allergic reaction, like a bee sting. for example, this headline -- rising cost of the epipen puts pinch on families.
10:55 am
senators demanded an urgent briefing on epipens. caroline johnson of "the washington post" joining us now. what led to the stories? guest: well, in august is when parents are buying epipens to stock them up for school. and they're putting them at grandma's house, daycare. and so, this is when people are going to the pharmacy and finding out how much and epipen costs. over the last eight years, the price has gone up from about $100 for a two-pack, to $600. that is the list price, it is not what everyone pays. but people were beginning to feel that when they went to the pharmacy. and they were putting out word on social media and contacting their senators and representatives. i think that kind of lit the fuse of public outrage.
10:56 am
host: so the price increase got the attention of politicians. when did congress get involved, and how did they get involved? guest: well, different members of congress started calling for investigations and hearings into various aspects of the pricing. and they held a very well attended, very lengthy hearing when heather bresch, the chief executive of the company, came before them and was asked to explain a lot of things about the pricing, about the profit that the company makes. it was well attended. there were kind of an unusual amount of bipartisan agreement, i think, that these price hikes were unconscionable. host: in a few minutes, we will watch a portion of that house oversight committee hearing on the epipen price increase. you mentioned heather bresch, the ceo of mylan appeared.
10:57 am
also, an official with the fda. what does congress hope to hear from the fda? guest: well, whenever congress has questions about drug prices, the question comes up, why hasn't competition solved the problem? is there a barrier? can competitors not get their products through the pipeline? it is a big question with epipen. it is not a new drug, it has been around for decades. and they wanted to know why there are not competitors. i don't think they really found the answer satisfactory, but there is kind of a variety of reasons that it is hard to make a true generic of epipen, which is both the epinephrine, the drug inside the injector device, and the pen itself. that allows, making a true generic, something that is truly, truly, truly indistinguishable from the brand product, is a little harder for this kind of combination. host: you used the term virtual
10:58 am
monopoly in reference to mylan and the epipen. what is mylan's actual market share when it comes to epipen's? guest: they have had the vast majority of the market share. it changed a little bit because there have been competitors over the years, but it is around 90%. they have basically the lion share of the market. host: the guardian newspaper has an opinion piece written by a mother who says the epipen is a lifeline, not a luxury. what is really at stake here? guest: for parents, especially, this device is something that they send their kid to school with or to summer camp with, and knowing their child has a food allergy that they could use this device to save their lives, in the case of a severe allergic reaction, so from a parent's point of view, this device is something that is not optional
10:59 am
at all, no matter how expensive it is, so that makes it even more frustrating and outrageous when they see the price has gone up so much. i mean, for the company, they made a lot of money off of this product since they acquired it in 2007. so it has been an important drug for them. and then, from the politician's point of view, they want to find out generally why drug prices have been increasing and if there is anything they can or should do about it and to what extent it really is a problem for the health care system and patients. host: now, let us watch a portion of that house oversight committee hearing from september. we start with questions from democratic congressman lacy clay of missouri. congressman clay: ms. breasch, i want to ask you a series of yes and no questions and i will give you an opportunity to respond in
11:00 am
more detail if you would like at the end. first, epinephrine is a n essential life-saving drugs, correct? >> yes. congressman clay: do you admit that you have raised the cost 2000%? x yes. triedyou admit mylan has to expand the epipen market? >> yes.
11:01 am
>> and according to reports on -- in 2016 that we are continuing to open up new markets, new access with public entity legislation that would allow restaurants and hotels and really anywhere you are congregating, there should be access to and at the pen -- two and epipen. an agreement was reached preventing it from putting a generic on the market under2015 or earlier circumstances, is that correct? >> yes, sir. you admit by delaying the entry of a generic drug into the marketplace, mylan has had less competition? , not too oftenat
11:02 am
but by having the delay? >> we have had competition every year. >> the new york times reported that although my land was once taking to 10% price increase is to -- two has made 15% increases when generic competition seemed imminent? do you admit in anticipation of generic competition, my land raise the price more sharply than it had in the past? >> not due to generic competition. we did increase the wholesale acquisition cost, which as i have stated, we get 274 out of the 608. 8%.eceived an average of
11:03 am
>> and the price, do you admit these price increases were intended to generate even more significant revenues before generics entered the market? was that the intent of raising the price, that you receive additional revenue? >> we have certainly received additional revenue but on the 274, 9678. andave you ever witnessed individual having an epileptic seizure? i grew up in the 1960's and 70's and i had a friend that eyewitness on a couple of occasions, these seizures. have you ever seen an individual have a seizure? >> due to anaphylaxis? >> yes. >> no, sir. >> it is not a pretty sight.
11:04 am
modern medicine has advanced the way that is beneficial to patients. yours have companies like take advantage of this situation, take advantage of these people who are really in need of this medication, i think that wes to something are better than that. corporate america, that the pharmaceutical industry is better than that. seconds, how do we get to this point that we have a culture like this in corporate america that wants to stick it to consumers? ourll i can speak to is culture, which mylan has for and invested spent
11:05 am
in being able to produce to-cost pharmaceuticals provide access. over 21 billion doses, we've saved the country over 180 billion dollars. our promises to provide access. to be able to give 700,000 free pens to schools with no strings -- ched >> you initially put it out of reach of the average consumer. >> recent news articles have documented lobbying on behalf of mylan to add to the list of medical services by the u.s. medical services task force. preventive medical services prevent illnesses before they cause symptoms or problems, as i understand it.
11:06 am
currently treatments receiving a grade of a or b by the task force are required to be offered to consumers with no out-of-pocket costs. supporters of adding the epipen to the list of preventive medical services argue that this measure will help get access to epipen without cost sharing. ms. bresch, will adding the epipen to the preventive medical services list, will it do anything to lower the actual price of the device, the overall reason for our hearing today? >> so the preventive drug list, as you've mentioned, would make sure everyone has access. but what we have now done with the generic drug and dropping the price to 300 we believe provides that similar access but believe that obviously the importance of epinephrine auto injectors should be part of the preventive drug list. >> so you are still pushing to have it on that list?
11:07 am
>> i absolutely think it should have -- yes. >> do you believe that spending lobbying resources to add the epipen preventive list is a realistic solution to stem rising drug prices? >> but, sir, that's why what we did is so unprecedented. we dropped the price in half by introducing the generic. >> but you still want it on that list? >> just to ensure that -- just showing the importance. >> why not reduce the price instead of those lobbying resources. >> it is about getting epinephrine in schools and eventually -- just like a defibrillator. when you need when seconds count and they should be where you are. >> we don't disagree with that at all. we appreciate that the product can't be there and can't be
11:08 am
useful. but this list, i think we need to plumb the depths of that. the list also -- won't this ship the full cost of epipens to government payers such as medicaid, medicare, health insurers, employers, eventually lead to go an overall list of premiums in other co-pays and consumers? >> no, sir. by, one, putting the generic like we have 300, over 85% of our patients pay minimal out-of-pocket costs. by reducing it by half, reduces it even further. this is not all about cost shifting. it is making sure everyone has access. >> it takes the pressure off bad publicity for a cost factor to get it paid for by medicaid, medicare, et cetera. let me shift over to mr.
11:09 am
throckmorten. the delay, the bureaucratic maze. some drug companies are taking advantage of your agency's failure to approve more generic drugs. i think we have seen that. we're questioning that today. what can we do to expedite approvals to make we prevent drastic price spikes? we heard testimony in our last go round that was a lot of bureaucracy? >> i want to take issue lightly with that of where we are as an agency. there was a time when our resources were not able to keep up with the applications we were receiving for true generic drug products. not authorized generic but true drug products under the abbreviated new drug applications. there was a time in 2012 where
11:10 am
we didn't have the backlog. we had over 4,400 applications that needed to be reviewed. in 2012, with congress's help, we got additional resources allowing us to hire new individuals, put in place new processes. the result of that had been over 2,200 approvals or tentative approvals since 2012. so we have in fact, made progress in reaching chemicals -- conclusions regarding true generic products. >> what about the markets. are you doing anything to identify markets that are at risk of becoming monopolized? >> sure. we agree with everything that's been said about the power of competition and us taking the challenge on. us making new products. in particular when you talk about auto injectors for epinephrine, the public health
11:11 am
value is even higher. we need to put particular attention. we have done several things specifically about difficult to develop products like the epinephrine auto injector. i mentioned a couple of them earlier. the guidances that we have put out, talking about how to put these products on the market efficiently, quickly, how we're going to review the data, the kinds of information you need. in addition, we meet with any company that has a product with this public health value, we offer to meet with them individually. we offer to respond to their questions in writing >> i appreciate that. my time has expired. but i would make a statement that if there are companies that are having difficulty, i certainly think that members in this panel would love to hear directly from them and come
11:12 am
directly to you to ask those questions. because we want to deal with this. we want to have the competition. we want to see the price reduced. we don't want hearings like this on a regular basis. my time has expired. now to the gentleman from massachusetts. >> thank you, mr. chairman. ms. bresch, i want to go back to the profit you have given us today. last year the price was about $460 per a two-pack. is that right? the documents you gave us are totally deficient in trying to figure out how much you're charging people and how much it
11:13 am
cost you, just so you know. i know we have outstanding document requests for your company. i hope you can comply with those as soon as possible to help the committee with this work. so let's -- just go off your chart there. $401 one year. that was 2014? $530 in in 2015. and a whopping $608 this year so far. so how much money were you making per epipen back in 2014 then when you were charging $400 >> so, sir -- >> please, not another chart. >> i'm just saying that the $235 - >> i'm not talking about that. i'm talking about the top price. >> we -- >> talk about the overall price. >> we received $235. >> look, that's not what i'm asking you. can you just answer the question. when you were charging $400 back in 2014, how much were you
11:14 am
making? >> equivalent to the $50 -- approximately $50 -- >> okay. $50. >> $40. >> $40. >> $40? >> yeah. >> $40 back then. >> i believe so. >> 2015 it went up to $500. how much were you making that year? >> we received $219. our profit was around $38. >> $38. now it's up to $50 this year? >> approximately. >> if you're only making $50 this year, you must have been losing money the previous years. you have gone up $200 in the overall price, top price and still only making $50. i can't understand that. the numbers don't work. based on the documents you have given us. >> so, sir, the 608 is the wholesale acquisition cost. >> we have done that dance. we have done that dance.
11:15 am
i understand that. >> and then it's approximately $50 a profit off the 274. >> mr. throckmorton -- let ask you, do you do business with the v.a.? >> yes, we do. >> what's the v.a. paying? >> i'm not sure of the cost -- >> they have the ability to negotiate their own drug prices? >> yes, sir. >> it's a hell of a lot less, i bet. >> yes. >> maybe that's what we ought to do for everybody else. negotiate directly with the pharmaceutical companies. that's what i think should happen here. i think it was not your intention but i think it might have helped congress get around an issue by showing the blatant disregard you have and disrespect you have for people who desperately need this medication. and you talk about expanding the abilities for people to have the epipen.
11:16 am
people in my district can't do it at $608. and a lot of those people don't have discounts. they're regular middle-class people. they don't have that discount. and medicare part d, their increase -- i know the access went up by 164% since you bought the company from merck. but the cost increase are up 1,151% based on on the study here that i have from julie et kobanski and patricia newman. i want to enter this for the record. this is disgraceful what's going on here. but i think in a way, like i say, you have done us a little bit of a favor here by just showing you what's wrong with this system, what's wrong with our health care system.
11:17 am
i think it's disgusting. i'll yield back >> thank you, mr. chairman. ms. bresch, i wanted to get inside the mind of a large drug company ceo for a minute. when did you sit down and decide after 2008 you acquired the epipen. when did you decide to use this model price increase. and how did you come to that decision? >> it was first recognizing the fact that there's a severe shockingly low understanding of anaplaxis. there were a shockingly low number of people protected with epipen's. >> so you decided to raise the price? >> we committed to investing in this product to provide access. >> how much have you made over
11:18 am
eight years? >> it is absolutely our largest product. but - >> i just say how much have you made? you said you invested a billion dollars. you know how much invested. how much did you make? >> i don't have the cumulative number. >> but you know what you spent. do you think you're charging too much? do you think $600 is too much? or were you going to keep rising the price? >> sir, which is why we took the unprecedented action of putting the generic in at $300. >> we'll get to that. but did you plan on increasing the price in 2017? >> no, sir, we did not. >> but you did have a plan the raise it every year for five or six years? >> and if you look at what we received -- >> no. i just asked you a question. did you have a plan to raise the price every year for six years? >> we had raised the price.
11:19 am
and i think managing to what we received, that 274 out of the 608 is what we were managing. >> you are proud of your company. you got $100 for the drug i had one of your reps come by my office back in 2009 or 2010 to show me how to use it. so i know it cost a little bit of money. generally when a drug goings to generic, doesn't the drug go down? >> which is why we dropped it to $300? >> after you jacked it up for $600. you fixed the price on the drug. when did you know you were going to release the price on generic? >> we released it several weeks ago. >> but when did you know as a company? it takes months, maybe years. >> no. we're putting an authorized generic in the market, which is equivalent to --
11:20 am
>> we are supposed to feel good because you have a judge overcharging six times what it's worth and dropping it to $300. >> sir, it was $600. >> do you believe it was too much at $600. >> we thought it was a low prior and we now lowered it by half. >> if you thought it was fair, why not leave it where it's at? >> we wanted to address the patients that are paying the wholesale acquisition cost. the system wasn't intended for people to pay the wholesale acquisition cost. that is happening at an alarmingly rising rate. we put it the generic to side step that. >> you are doing everyone a favor by charging three times what you acquired it for. i'm not buying your argument. do you have a conscience about this? >> giving 700,000 free epipens to 66,000 schools and wanting to
11:21 am
get into all the public schools across america. >> well, if it cost 20 bucks they could afford to buy their own. instead, you chose to jack the prices up and make everyone want to feel good about you by saying how much you do. you took a very inexpensive drug and profited handsomely. when you take drugs that are life-saving drugs and people don't have a choice. they can't go to a different department store to have that tie. you decided to charge $600 instead of cutting off her arm. now you're dropping to to 300 to make us feel good. and that's 10 times what it should cost. you can sit there with with a clear conscience today? is that your testimony?
11:22 am
>> congressman, we want everyone who needs an epipen so everyone can have one? >> lower the price then. are you going to lower the price? >> trying to address every facet of patient to make sure they can have access to epipensis what they will remain focused on. >> now recognize the gentleman from virginia for five minutes. >> ms. bresch, welcome. i was listen to go your earlier testimony, your formal testimony. and i was just struck with what humanitarians you people at mylan really are. and if you listen to your testimony, you would never know what the abhor is about.
11:23 am
do you understand the nature of the uproar? >> i do, sir. and i truly believe the story got ahead of the facts. because i think people -- because of the complexity around the pharmaceutical system, i think that us being able to now really put on the record what we're making, comes to mylan and. >> you'll forgive me. i only have five minutes. so i have to manage my time like you have to manage yours. i don't want to cut you off, but i want to get to some questions. so let me get this straight in terms of coniology and sequencing. you took over the previous manufacturer in 2007. is that correct? >> correct. >> the price of epipen had been fairly stable up to that point. is that correct? >> yes. >> so since 2007, you've raised
11:24 am
the price 15 times, if i understood it correctly? >> yes, sir. >> so what happened between 2007 and 2016 different than the previous manufacturer and producer? did product costs sky rocket for you? >> costs of goods increased for sure. >> well, how much? >> almost 100%. >> what was the comparable price of epipen in that 100% cost increase? >> i'm saying over the last eight years. >> right. and i'm saying -- you went from what to what in eight years in what you charged maximum price? i took your point that not everybody pays that. we have a medical system with all different kinds of pricing. what was the comparable increasing? you were absorbing 100% cost to you to produce.
11:25 am
what was the comparable cost in theory to consumers, maximum cost increase in that time period that you charged by raising costs 15 times? >> sir, today that's $274 that we receive for the epipen. >> well, i was asking for a percentage increase. if you're going to contend that production costs went up 100%, all right. what is the comparable price increase for consumers during that time period? your own testimony you acknowledged you raised the price 15 times. >> i believe it is almost 300%. >> presumyabley that's profit? >> after the cost of goods come out and you take out all other costs. >> i don't care what your profit is. america is built on profits.
11:26 am
profits are an incentive. what i care about is what you charge consumers who have no choice. if i understand it, you've got a stranglehold on the market. you control 94% of this market. is that correct? >> sir, we have a large market share. we don't control. >> i'll withdraw the word control, ms. bresch, if it offends you have 94% of the market. >> yes. >> yes. >> consumers are experiencing it a little differently. and so because you have such a stranglehold on the market, you can do what you want in terms of pricing? >> sir, we have had many competitors in and out of this marketplace. >> they don't equal 6% of the market, ms. bresch. that doesn't even pass the giggle test of what you are asserting. you have had a monopoly and it is at the expense of people who need it. this is live-saving in some
11:27 am
cases. people who risk anaphylactic shock don't have a choice. they have to use it. and i'm wondering what your sense of social responsibility is to those people. i mean, how do you balance -- i'm looking. i could go through for you, statements you made and the company has made in the annual reports to investors. and it sure is a different set of statements than we have heard today. i didn't hear the humanism, philanthropic call. i heard statements about favorable pricing. i heard statements about how it has delivered double digit growth to date. that's because of your price. >> but, sir, it's also because we were reaching double the amount of patients and protecting and having the ability to be prepared with an epipen.
11:28 am
so we absolutely expanded access and reached to patients who are at risk as well as putting them in public places like our schools program. >> during the call to investors, one question asked to you was, what other prospects of future price increases for epipens. this is an investor meeting. and your answer, and i quote, you should foresee that just continuing as we continue to maximize the epipen franchise. what did that mean? if it wasn't reassuring invest investors we were going to maximize our profit. i don't think profit is a bad thing. but i do think it's a bad thing when somebody exploits it against consumers who live on its price or don't. >> and, sir, that's why we have taken every step to ensure
11:29 am
everyone who needs an epipen has one. all of our programs, whether access program, the card, or schools program, so our 700,000 free epipens throughout the 66,000 public schools and we want to reach the 65,000 public schools. >> my time has run out. there is a dr. jeckyll and mr. hide quality of your testimony. there is one message in the public. quite another for investors. i yield back. >> now recognize the gentleman from south carolina. >> i want to highlight two stories from my district. an eight-year-old son diagnosed with severe food allergies before he turned one. one day, he ate something and began foaming at the mouth -- foaming at the mouth and her nightmare came true. when he came home, he told his mom, mom, i don't want to die.
11:30 am
even five years ago, he knew how serious the reaction was and it is throat was closing and epipen saved his life. one person from illinois is deeply concerned about the skyrocketing prices. haveon and daughter both life-threatening allergies and as a result, their family has to ensure they have two auto injectors at school, camp and in mom's purse. the family knows what it's like and that is why michelle took the time to write to me and urge me to do everything i can my sure they can protect their children with the same level of care. they are lucky and have good insurance. like lisa shared with me, we don't know if they will always be in that position. one day they may not be able to afford the epipen, whose price keeps going higher and ire. and i agree. even a single life lost due to lack of affordability in this drug is one too many.
11:31 am
i'm going to ask you short one-word answer. don't try to filibuster and run up my time. so i need you to answer yes or no. earlier you said epipen has given out 700,000 epipens -- mylan has given out 700,000 epipens to schools across the nation. is that correct? >> yes. we have given free epipens. >> mylan discounts through the epipen for schools program. is that correct? >> yes. . they can purchase additional pens if they want. >> okay. so this is particularly important in illinois. states like illinois that have laws that require schools to stock epinephrine auto injectors. this is a program in schools that your own mother was instrumental in getting states to adopt at her capacity a president of the national association of state boards of education.
11:32 am
so we can better august, august 12th to may of 2016, approximately how many schools signed certification forms purchasing discounted epipens at a price of $112.10 per decided to purchase additional -- besides -- >> how many schools have done this? >> 5%. about 45,000 epipens. >> 45,000 schools. >> no. no. epipens purchased. >> how many schools? >> i'm not sure -- >> answer my question. you don't know -- you just quoted a number of how many schools you had given them to and how many schools you had not given to. you can't tell me how many schools have bought epipens from you on this program you're so proud of? >> it's a small number. it's very small. the 66,000 schools are who we've given free epipens to. >> i'm also not as concerned
11:33 am
about your profit making. i believe in the free market. what i'm concerned about is your monopolistic practices. there's confusion in public reporting. could you simply confirm, yes or no, whether schools have purchased discounted epipens had to make any representation and warrants to mylan that they would adhere to certain conditions in order to access the discount price that you give them? >> schools did not have to purchase any epipens. >> no. the schools that are trying to get the discounted price from you, did they have to certify or make any representations or warrants to mylan they would adhere to certain conditions in order to get the price. >> for people who wanted to buy it at the discounted rate, yes. but that had nothing -- the free epipens had no -- >> i'm not talking about the free epipen. i'm holding he -- mr. chairman i'd like this entered into the
11:34 am
record. >> without objection, so ordered. >> thank you, mr. chairman. it's a certification form where mylan has actually said that the school hereby certify that it will not in the next 12 months purchase any products that are competitive to epipen autoinjectors. you actually put into practice forcing schools and you're so concerned about these kids that you are limiting the schools' ability to buy pens from someone else. so you're saying we'll sell it to you for $100. if you want it for the $100 price you need to sign this and say you can't buy this from anybody else. don't answer, i'm not asking your question. that's what you've done here. >> i disagree with that. they did not have to buy our pens. >> if they wanted to get this price. >> if they wanted a heavily discounted price, yes, they bought epipens. >> heavily discounted price is $112.10 which is where it was
11:35 am
before you jacked up the price to $600. so it's not a discounted price. it's discounted because you raised the price and you say you want it at the old price before we jacked it up for profits, you need to sign this and say you will not buy this from anybody else. i'm not asking you a question. this is what you have done. your own document says it. >> they don't have to buy them and everyone -- >> you don't have to buy them but your own mother is lobbying to make sure they're in all the schools. this article says that many members of the board of nasbe didn't even know there was a family connection between you and your -- mylan and your mom. through you. she was out there trying to passing out your guides from mylan as she was out there talking to school boards, she was pushing for these epipens to be put into school districts. then they can't buy it for a longer -- >> congressman, that is completely inaccurate. >> then you tell schools you want it at the old price, sorry you can't buy it at the old
11:36 am
price. because we -- unless you promise not to buy from anyone else. that's an unfair monopoly. i yield back. >> you have had a lot of questions today and lot of pressure put on you. personally, i'm hesitant to go down the path of government getting involved in what individuals make and can make. this is a free enterprise system and i get worried if we start going down that street. where then is bottleneck is occurring and dr. throckmorton, i would like to an abbreviated new drug application is an application when a manufacturer has a drug and that is what they must utilize. ask for an authorized generic alike we have been talking about, that is not approved under that application. do you know how many abbreviated new drug applications are pending with the fda?
11:37 am
>> we have 1700 responses we sent back to sponsors requesting additional information. we are waiting for that information to come back. there are other applications we are reviewing and the timeline we discussed earlier. exit is my understanding the generic application submitted to the fda are outpacing those that are approved 321. is that correct? >> i cannot verify that number. there are 2300 applications before the agency. this year, we have approved 600 products through the middle of this year. >> could you get the numbers back to us? what number of applications are admitted versus those being approved? and can you tell me the median approval time for generic drugs right now?
11:38 am
>> i don't have that information. it is also changing. in the time before we got the user -- about >> i would offer to get you the trend if i could. that would be more useful. >> the generic pharmaceutical association says it is taking 47 months. four years. >> that is simply misunderstanding. >> what do you mean that's a misunderstanding? >> 47 months is from the beginning of the user fee act. nowproducts being approved from the beginning -- >> are you disputing that it takes four years? >> i'm disputing that if a product were to come in today, it would not take 47 months. >> you can make all sorts of promises, but for those have been trying for four years from
11:39 am
the time they start to the time they finish, -- >> there are products that come in and sometimes insufficient to get approval. that's because the database a minute are -- try to find out how long it takes from beginning to and and from those who have been involved in the process, they are telling us it takes four years. since 2012, jericho manufacturers have been paying fees to the tune of billions of dollars to speed the process up through the generic drug user fee agreement. saidpast july, the fda they acted on more than 90% of generic applications. the backlog. the applications that have been submitted. the backlog is 90%. there was a total of 4600
11:40 am
applications we needed to review. than 100 thatr have not gotten a response. >> are you saying of the 4600, there's only 100 left and 4500 have been approved? >> less than 100 remain to have a response. most products with a full dossier have been approved or given tentative approval. are not sufficient that haven't met the data need for us. i don't think you would want to rubberstamp them. >> the free enterprise system works when there are multiple products out there for people. we have a product now where epipen has 94% of the market and you are the only major player. the reason for that is because you guys are not processing the host of others trying to get in when it is taking
11:41 am
3, 4, 5 years for that to occur and who knows how many millions of dollars to go through the the system isnder not working. >> i would like to show you the trend they do. that's not the trend we are seeing. >> the european counterpart only has 24 generic drugs awaiting fromval and they do it beginning to end and lesson here. that's not what we are experiencing here. quite european system is different from ours. >> it must be because it's not taking as nearly as long. >> i would say they are apples and oranges to try to compare us. >> mr. chairman, our time is expired. we have tremendous concern for made drug going from $100 to $600 and there are issues to deal with but we cannot place all the blame -- the fda has to get their act together and
11:42 am
restore the process to getting this thing going through. i look forward to seeing the information you say you would send. >> we now recognize the general from vermont. >> a couple of matters. thank you for having this hearing. i thought your opening statements set the right tone. is in the market that is broken that is causing these prices to be increased and asking about whether there is something we can do with the fda and the approval access processor and i'm all in. all disclosure, mylan has an excellent production facility in vermont. many people work there and they are proud of it. third, what the drug companies do, i totally agree is widely important. my first wife had cancer.
11:43 am
nine years and medication. it is important to get it right. here's the dilemma. it is best sent up by a letter. my four year son has a severe peanut allergy. i'm a single mother working a low-wage job with little health care coverage. i can't afford to pay this much for epipen's and i can't afford not to because that cost is possibly his life. the heart of the matter here is that moms and dads are being given a choice. they can pay more than they can afford or they can risk a loss they cannot endure. that is why it is so urgent that we work together to get to the bottom of this. i want to focus my questions on some of what i think are the market breakdowns for lack of
11:44 am
competition. we have to make some reforms. when your company bought the epipen, that was 2007. how many were sold then? >> much less than today. >> there is a lot of head scratching going on here. >> i totally appreciate that. there has been a lot of misinformation, understandably so given the complexity that many of you have acted out. -- pointed out.
11:45 am
>> $50 sounds like it would be reasonable, but you you can tell from the questions there's a lot of head scratching going on here. >> i appreciate that and there has been a lot of misinformation. therstandably so, given complexity in the system. >> i'm going to ask you to get your graph out where the wholesale acquisition price is just under eight bucks. then you go down to the bottom and that is the $50 per profit. that $50 sounds reasonable. the rebates and allowances, who is getting all that money? >> that is between the other people in the supply chain. the pharmacy benefit managers, retail pharmacy, wholesalers and insurers.
11:46 am
>> the service they provide, isn't it to negotiate a best price with the pharmaceutical companies to get a given drug. can they get the rebate? >> probably be better to have -- philosophically i think that pharmacy manager of the system -- >> about talking philosophically. or to understand how it works. the pbm that buys huge drug quantities, they get a discount from you and they keep some of that and that is how they make money. part of their way of negotiating is with the formulary. if you have heart disease, there might be an option of drug a, b, or c and they put on the formula drug a and they get increased rebate going.
11:47 am
with respect to epinephrine, there is no formulary. if you're having shock, there is only one thing you need and it is the product you sell. >> there has been competition. if i could only get this point. they launch the project at the end of 2013, we had to face formulary choices of not being on the formulary did to the competition in the market. >> will you ended up with 94% of the market. >> i would ask that people recognize the product. it is more complicated. the product was recalled of the market for safety reasons. >> i understand that. in this graph, what is impossible to understand is how do something cost $608 when the company that sells it is only making $50? that is hard to understand.
11:48 am
>> i understand how complicated and how head scratching that is which is why i have said i would welcome the opportunity -- this is about epipen's. >> i don't have time, i have to keep going. the vermonter with the choice, it is tough on taxpayers and the medicaid program. in 2011, it was paint $111 and this is a lot of money for us, we spent then $111. now it is $557. we went from $256,000 to $1.7 million. that is tough. >> that is why the generic, being able to put it into the market would help lower health care cost across the board. >> the generic, what i
11:49 am
understand is, it used to be a position that you had is that doing these authorized generics was a threat to the generic industry. that is the public record of your point of view. >> a decade ago, -- i know that this is complicated. the authorized generic of keeping a first generic or competing with the generic, and assistance, that is not the case -- in this instance, that is not the case. >> the cost of that depends the netherlands is $105. that is where corporate headquarters are. how did they get $105? you move the headquarters from the u.s. to the netherlands. how do they get to buy it for $105 and we pay $608? >> i'm not sure of the cost. what i would say as they have a
11:50 am
completely different system. >> i yield back. >> we would appreciate some clarification on that. we do have a pharmacist on the committee. mr. carter of georgia. >> thank you. before i start, can i inquire of you, the witnesses took a and they are still under. -- oath. have you ever seen a child have anaphylactic shock? >> i have not. >> have the ever gone up to a pharmacy counter and carried a pack of to epinephrine's and to epipen's and told a mother of a child who has had anaphylactic shock with analogy that the president that is going to be $600? >> no. -- price of that is going to be $600?
11:51 am
>> no. >> have you seen it mother cry because she can't afford it? i have. i have seen a mother go out and have to call a family member to see if she can get the money together to try and see if she can pay for this medication that she knows her child has to have. i have witnessed that firsthand. none of us are without blame here. i include my profession as well. let me ask you a couple of yes or no questions. the $608 wholesale acquisition, is that awp? >> nesser. >> -- no sir. >> it is $608. you said that your company receives approximately $274 after rebates. after you take out the expenses like manufacturing and
11:52 am
acquisition costs, regulatory compliance, all of those things come your profit is even less than that, correct? >> correct. that would be the $50 per pen. >> after you do that, the have any contracts? any pharmacy benefit managers? >> yes. >> can you describe some of those contracts briefly? >> they are around products, multiple product. to participate on the formularies so patients have access to the products. >> we established that over half of the list price does not go to mylan. you know how much they receive? >> i don't have a breakdown
11:53 am
between the channels. you know specifically how much -- i don't have -- >> nor do i and on the pharmacist. i don't know either. nobody knows. that is the problem. there is no transparency. >> do you know how much they receive in rebates and other fees related educated? >> i do not. all i know is that my computer calls insurance and they tell me how much of what to charge the patient. the know how much you get back in rebate for pbm?
11:54 am
>> i don't want to give you an inaccurate number. >> can you provide us with that information? >> i will certainly go back. i don't want a give an accurate number. my good friend from georgia has introduced this bill dealing with the mac transparency act. this would help us and take a step towards transparency.
11:55 am
until we have more transparency, we are going to continue to see these kind of cost increases. that is why we need bills like house resolution 244, my good friend representative doug collins from georgia has introduced this bill dealing with mac transparencies. it's called the mac transparency act. this would help us take a step toward transparency. mr. chairman i want to thank you , for holding this hearing today. i want to reiterate my request that i have made to you for time for time about investigating deceptive practices and how they are impacting drug prices. would you agree with that? >> i would agree that transparency is needed. the health care system has evolved dramatically. as you have seen, as a
11:56 am
pharmacist, the system has not kept pace with the evolution of the health care system. >> the system has not kept pace. they've had billions of dollars and wanted to let you know. i have to take a prescription to a mother whose child has suffered from anaphylactic shock and watch her cry and watch her have to call family members to give money to pay for the medication. we don't know where it is going. you say it's not going to you where is it going? , i need to tell her where that money is going. >> the most immediate thing i can do is put a generic on the market. >> don't go there. i know better than that. that is a crock. you know that and i know that. there's no difference whatsoever.
11:57 am
>> we cut the price. >> do not do that to me. don't try to convince me that you are doing us a favor. you are not doing a paper by -- not doing a favor by that. you could have brought the price -- instead, he said you are going to make it generic. >> the point of the wholesale acquisition cost of getting to those patients and making a difference, to make your everyone who needs one has one, i cannot ensure that the -- you would not have gotten it like you did now. i'm waiting for the information you promise me you will send to this committee. mr. chairman, i'm going to hold you to that. >> what i can tell you is that the most immediate thing we can do was put a generic in.
11:58 am
it bypassed the formulary, everything you are describing. >> are you getting a rebate on those generics? are you getting a rebate from the generic version of epipen? >> we have not done those arrangements that. >> are you planning on getting a rebate? are you planning on getting a rebate from the pbms? >> i honestly don't know. >> remember the oath. i'm not negotiating those costs. as you know, the formularies, the pbm's and the generics, they are very different. >> with the gentleman yield -- i just want to help clarify something, -- >> yield.
11:59 am
i just want to take this one step further. do you know what you get from the pbm's or the regular epipen? how much rebate? the gentleman was talking about that. >> i don't want to give an inaccurate number. >> can you give us the information? >> i will. >> do you expect to be getting rebates from the generic, is that right? yes or no? >> he asked specifically about the pbm and i don't want to give an accurate -- >> are you getting -- >> we pay rebates. on the generic as well. >> that is not what he is talking about. >> i can't sit here today and tell you what comes back on the generic. i can tell you there are discounts and rebates paid. it is a smaller degree on the generic. >> mr. chairman, reclaiming my time this is a shell game. , that is all it is. i hope you never have the experience of going to a counter
12:00 pm
and telling him other of a child -- telling a mother of a child who is suffering from anaphylactic shock that she needs to pony up with $600. i hope you never experienced that. mr. chairman, i yield back. hour that was about a one of a three-hour hearing on the a b penn. on can watch that carolyn johnson from the "washington post" is joining us again. you wrote a story about that .ylan profits what happened? guest: profits they reported, that they make $50 proifit per


info Stream Only

Uploaded by TV Archive on