Executives at Mylan N.V., the pharmaceutical company that drew controversy for increasing the price of EpiPen devices nearly 400 percent, donated heavily to Democratic senator Joe Manchin's reelection campaign as the company planned to lay off more than 400 workers in his home state of West Virginia.
Mylan—whose CEO, Heather Bresch, is Manchin's daughter—announced Friday that it will lay off 15 percent of the workforce at its manufacturing plant in Morgantown, W.Va. The plant, one of about 50 that Mylan has around the world, employs upwards of 3,000 West Virginians and is one of the state's largest employers.
The majority of the layoffs will occur in the plant's operations division, which consists largely of hourly-waged workers. Mylan has confirmed that some of the employees will have recall rights, meaning they can potentially return to work after a specified amount of time if the company chooses to expand, while others will be offered buyout packages.
In a statement provided to the Washington Free Beacon, Mylan blamed the changing pharmaceutical industry and evolving "regulatory expectations" for forcing the company to downsize its Morgantown plant.
"As the industry has changed and regulatory expectations have continued to evolve, we've realized that our Morgantown plant needed to be rightsized to be less complex," Mylan said. "The right-sizing is consistent with discussions we are having with the U.S. Food and Drug Administration and is necessary in order to position the site as best we can for continued operations."
The layoffs come on the heels of campaign finance disclosures showing that Mylan executives donated heavily to Manchin's reelection campaign this year. Individuals employed by Mylan gave $51,250 to the senator in the first quarter of 2018. This is on top of the $132,450 that Mylan employees and its political action committee have donated to Manchin since he entered the Senate in 2010. Mylan is the senator's second-largest source of federal campaign funds, according to the Center for Responsive Politics.
Manchin, a centrist Democrat, is facing a tough reelection battle this year in a state that President Donald Trump carried easily over Hillary Clinton in 2016.
Mylan did not respond to questions about when a final determination on the layoffs was made and whether any of the company's other facilities will experience similar layoffs.
Alec Thomas, communications director for Rep. David McKinley (R., W.Va.), in whose congressional district the plant is located, told the Free Beacon that the news was shocking, especially since there was no prior indication that anything was wrong.
"The announcement blindsided everyone, and frankly it's angering since we weren't given any notice or offered any insight into the rationale behind the layoffs," Thomas said. "The company mentioned an issue with the FDA. What is the issue and why didn't they come seek our help? Our office has been successful at helping constituents resolve issues with federal agencies, and would've done everything we could have to help resolve Mylan's, had it been brought to us."
"These are good-paying jobs and we don't want to see them go," Thomas added.
Mylan first drew criticism in 2016 after the company increased the price of EpiPen injectors, for which Mylan controlled 85 percent of the market share, to levels many considered unfair and even exploitive. The price for a two-pack EpiPen injector rose from around $100 in 2007, when Mylan first acquired the life-saving treatment, to over $600 in 2016.
Bresch defended the price increases, and the rise in her own salary from $2.4 million in 2007 to almost $19 million in 2016, as being on par with increasing health care costs.
The scrutiny surrounding the accusations of price-gouging led to an internal audit by the Department of Health and Human Services, which found Mylan may have overcharged taxpayers by $1.27 billion over a 10-year period. Mylan finalized a settlement with the federal government in August, agreeing to pay back $465 million for misclassifying the EpiPen as a generic brand to avoid paying Medicaid rebates. As part of the agreement, Mylan was required to enter into a corporate integrity agreement with the Department of Health and Human Services Office of Inspector General.
Manchin came under fire after it was revealed that Mylan and its subsidiaries witnessed a sudden spike in government funding after Bresch took over as CEO in 2012.
One subsidiary, Mylan Pharmaceuticals Inc., received only $13,815 from federal contracts between 2008 and 2010. The subsidiary did not receive any federal money in 2011 and 2012. In 2013, however, one year after Bresch took over as CEO, the subsidiary received $113,895 from federal contracts. Then in 2014, government funding dwarfed that of previous years, as the subsidiary raked in $1.5 million.
Another subsidiary, Mylan Speciality L.P., only received $6,516 from government contracts between 2008 and 2012. One year after Bresch took the helm, however, the subsidiary garnered $1.3 million from the federal government.
Amid the congressional investigation into Mylan, Manchin attempted to distance himself from the company, while encouraging his colleagues to be "open-minded and fair."
Manchin's office did not return requests for comment for this story.