Most of my columns during the past 16 years have been about helping small businesses. After working with small businesses for more than 25 years, it’s gratifying to see owners doing what is best without taking advantage of customers.
Most small businesses owners are close to their customers, so they quickly see the impact of any decision, whether it is raising prices or changing customer-service practices. The point is that small businesses care about their customers and will try not to do anything to hurt that relationship or take advantage of the customer.
The same cannot always be said of big businesses. Case in point: The recent behavior demonstrated by Mylan Inc.
Mylan is the owner of EpiPen, an automatic epinephrine injector device for potentially deadly allergic reactions. Indeed, the EpiPen potentially is a life-saver.
I have two EpiPens, and I keep them close by. I would have paid almost any price because it could one day safe my life.
There is no question that Mylan provides an invaluable service. However, the company controls 90 percent of the market without a viable competitor. It dominates the market, so Mylan can charge as much as it wants to, and it has done just that.
When Mylan bought EpiPen in 2007, prices were around $50 apiece. Now it is can cost $600 or more for a two-pack. Meanwhile, Mylan CEO Heather Bresch’s annual salary has gone into orbit as well – from $2.4 million in 2007 to $19 million in 2015.
The amount that customers are suffering seemingly has gone completely unnoticed by Mylan. The only times the company addresses it are when complaints get so loud that it is forced to do something or if a government agency is breathing down its neck.
Now, I will say the government also is at fault here because of how slowly it brings new drugs and equipment into the marketplace. The Center for Drug Evaluation and Research at the FDA admitted there are approximately 2,300 products waiting to be reviewed.
Mylan’s actions have demonstrated that greedy big businesses can care little for the customers who so critically need their products. They often take advantage of the system and regulations to maximize their profit with no concern for the people they serve.
Small businesses are proud of their communities and customers. This is something big businesses seemingly have lost.
So what does the Mylan example tell us about small business? It is a clear picture of what not to do when setting prices for your products. Pricing should be fair to your company and your customers.
Jerry Osteryoung, a business consultant and Jim Moran professor of entrepreneurship (emeritus) and professor of finance (emeritus) at Florida State University, can be reached at firstname.lastname@example.org.