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Mylan: Balancing Profitability and Public Approval in the Digital Age

Harris, T., Keddington, T., O’Rourke, J. S. (editor)
January 17, 2018
SKU:
BUS-004044
Region: 
North America
Topic: 
Strategy & General Management, Ethics & Social Justice
Length: 
7 pages
Keywords: 
Brand Management, Corporate Culture, Crisis Management, Customer Communication, Customer Relations, Ethics, Financial, Investor Relations, Media Relations, Pharmaceutical
Student Price: 
$4.00 (€3.7)
Average rating: 
5

In August of 2016, Mylan Pharmaceutical came under public scrutiny for its highly priced EpiPen, a drug used to treat life threatening allergic reactions. “EpiGate” erupted almost overnight, as EpiPen customers took to social media to voice their frustrations. Mylan was accused of using “greedy robber baron” tactics against a helpless customer base. Mylan issued several price related reparations to its customers (increased rebates, generic product offering, etc.) A month later, Mylan was still struggling to silence its critics. Why did Mylan’s responses fail to silence the critics? What was missing in Mylan’s strategy? This case illustrates (a) the influence of social media on corporate reputation (b) the difficulties of balancing business strategy and public approval and (c) the principles of successfully responding to negative news media. 5 pp. Case # 17-04.

Learning Outcomes: 
  1. To consider the issues that arise when a company’s business strategy clashes with public expectations.
  2. To show the power social media has given consumers to respond to company action.
  3. To investigate business response to public criticism and discuss the effectiveness of these responses.
  4. To encourage discussion about the moral and social responsibility in pharmaceutical and healthcare companies.

Reviews

Rating: 
5

There was contravery over the prices of the EpiPen because it needed to be affordable for those who suffered from life thretening allergic reactions and and could not afford the needed medication. Mylan's social responsible credibility was attacked when it came down to offering affordable EpiPens to save their customers in need.

Rating: 
5

From a consumers perspective, many people need the Epipen. And, because it is life threatening - they will pay for it. But, I definitely believe that they do not deserve to pay an extremely expensive price to survive. 

Rating: 
5

I believe there was a lot of controversy about the EpiPen prices because it is used for medical purposes. There are many other things that are over priced and nothing is said about them. Yes, the EpiPen is over priced and could be knocked down a few hundred dollars since it is a life saving medicine.

Rating: 
5

This case by far was the most challenging case to breakdown, because there was so many possibilites of how one change could effect every other aspect of the supply chain. I persoanlly feel that Mylan is only doing its job and charging the price that allows them to make a profit that will sustain their company. It would take an entire reform of US financial system to fix the issue at hand, one company can't be held to the fire. 

Rating: 
5

This case by far was the most challenging case to breakdown, because there was so many possibilites of how one change could effect every other aspect of the supply chain. I persoanlly feel that Mylan is only doinf its job and charging the price that allows them to make a profit that will sstain their company. It would take an entire reform of US financial system to fix the issue at hand, one company can't be held to the fire. 

Rating: 
5

This case really gets you to think about your business ethics. It is obviously not okay, in my opinion, for Mylan Pharmaceutical to sell a product that is a necessity and life-saving for a rediculously high price. On the other hand, from the business perspective, it is not like they can sell their EpiPens for free because they wouldn't make any money off of it. It is all about finding a middle-ground between pleasing the public and making a profit, but there is no conclusive right answer.

Rating: 
5

I like to tie this case to two other price hikes: A competitor to Mylan, Kaleo, sells both an epinepherine auto-injector (AUVI-Q) that gives voice instructions AND a similar concept for Naloxone, called Evzio, which can save people from an opiod overdose (there's an outstanding Leslie Stahl 60 minutes piece from November 2018). Both are insanely overpriced. Students tend to be even more familiar with Martin Shkreli (there's a great episode of the podcast "American Greed" on him) who raised the price of a life-saving drug from under $15 a pill to over $750 a pill. Those additional examples paired with this Mylan case really help probe students' arguments, particularly about the ethics of charging based on what consumers are willing to pay in matters of life and death. The voice-instructions undeniably add value for certain populations who may be anxious or unable to read standard instructions in an emergency. I like to press students on what other ways the firms could seek to add value once their patents run out and generics become available. Overall, the competitive environments in each of these scenarios must be reflected on to understand the product positioning and the perceived value of generic vs. name brand. The underlying ethical themes make this case a keeper.

Rating: 
5

Mylan: Balancing Profitability and Public Approval in the Digital Age is a case that really brings up issues about Corporation's Social Responsibility to provide consumers with products that they need at a reasonable price. This Mylan case makes you think about business from the perspective of a business owner and a person that needs something that they may not be able to afford. This case offers a lot of information and insight about the pharmaceutical industry.