Closing the Largest Generic Drug Plant in the US Is a Sick Joke

Closing the Largest Generic Drug Plant in the US Is a Sick Joke

Closing the Largest Generic Drug Plant in the US Is a Sick Joke

But Joe Manchin’s daughter, a company executive, is laughing all the way to the bank.


Morgantown, W.Va.—At a moment when public health and the economy were on the top of people’s minds, mass layoffs were the last thing pharmaceutical packer Carla Shultz expected when she got on the Zoom call with her union shortly before Christmas. Shultz has worked for 13 years at Mylan Pharmaceuticals here—a stable, union job at the largest manufacturer of generic drugs in the United States.

With Covid-19 vaccines getting approved, Shultz imagined that new work might be opening up. Instead, Mylan’s workers were informed that the company’s new owners were closing the Morgantown flagship plant and shifting the work to India or Australia, effective July 31, 2021.

“We’ve had no recalls. We’ve been FDA-ready every time. It’s a pristine plant with hard-working employees. It’s just unbelievable that they would shut us down,” said Shultz this month, standing outside the ranch house where her mother, Barbara, a coal miner’s widow, sat surrounded by family photographs, hooked up to an oxygen machine.

Just one of Barbara’s chemotherapy meds costs $7,000 a month, says Shultz. Nearing retirement herself, she doubts if she’ll ever find another job with pay and the benefits comparable to what she’s received at Mylan. Certainly not around Morgantown.

Mylan Pharmaceuticals pumps out around 18 billion doses a year of lifesaving generic drugs. For close to six decades, it’s produced everything from penicillin to Levrothyroxine, a popular thyroid drug that millions of Americans take daily. The factory’s not just a big link in the national production chain. It’s a big presence in West Virginia. Founded in the 1960s by an Army vet recalled fondly as “Mike” (Milan) Puskar, the business used to plow millions of dollars back into the local economy not only through contracts with local businesses and taxes but also through philanthropy. West Virginia University’s football team plays at Milan Puskar Stadium, not far from the plant. Puskar helped start a free medical clinic downtown that serves thousands of poor patients annually, and a breast cancer clinic at the medical school—named after Milan’s widow.

After Puskar retired in the late 1990s, the new directors went on a merger and acquisition spree. Mylan became embroiled in various scandals—most tragically, the EpiPen pricing scandal. In 2007, a two-pack EpiPen—a literally lifesaving necessity for those with severe allergies—was priced at $50; today, it costs over $600. Mylan, already one of the highest-earning drug makers in the country, last merged last November with an offshoot of Pfizer to form a new entity, Viatris. One of the newly formed company’s earliest moves was to close the plant and shift manufacturing overseas.

Offshoring manufacturing doesn’t mean the drugs will become any cheaper, points out Shultz, “The company will make more money off making that medicine overseas, but they’re not going to charge us any less for it.”

Joe Gouzd, president of the United Steelworkers local 8-957, which represents around 850 Mylan employees, is now spending hours each week explaining the company’s recently announced severance plan which will leave workers like Shultz with two week’s pay and benefits for every year they’ve worked, capped at 52 weeks. Gouzd says that the average age of the USW’s Mylan members is 42; the average number of years they’ve worked at the plant, 18.

“We are losing 2,000 jobs paying an average of $60,000 to $70,000 a year, workers that are buying homes…cars, that are paying for gas at the gas pump and going to the supermarkets; that are pumping money into the economy, as well as the tax dollars going into the school systems, into the sewage systems, the water facilities and so on,” says Gouzd.

In a soon-to-be-released study commissioned by the Democracy Collaborative, economist Michael Shuman puts the losses associated with the shut-down in the hundreds of millions of dollars in a state, West Virginia, that already has the sixth highest poverty rate in the country. Schuman estimates that Viatris’s plans will suck $403 million in wages from the local economy and cause knock-on effects likely to result in the loss of 4,642 jobs, or nearly 6 percent of the jobs in Monongalia County. Add up the tax losses and secondary costs of depression, addiction, and potential drug and domestic abuse, and “It’s the economic equivalent of a nuclear bomb going off in the county economy,” says Shuman. The anticipation of reduced spending by Viatris has already caused the local water utility to increase its water rates on residents.

Gouzd, like Shultz, has all sorts of questions. Among them: Why hasn’t West Virginia’s senior senator, Joe Manchin, made an effort to keep the plant open? Does it have anything to do with the fact that his daughter, Heather Bresch, was a top executive at Mylan for almost eight years, and worked there for almost three decades? Bresch, the second most highly paid executive in the Pittsburgh region, left the company upon the completion of the merger, receiving a golden parachute estimated to top $30.8 million, according to the Pittsburgh Business Journal.

Why has the Biden administration so far rejected pleas from the USW and others to invoke the Defense Production Act to keep essential generics production inside the United States? And why is Viatris refusing even to consider a sale of the plant to anyone—including its employees?

Gouzd, who worked for 22 years at Mylan, steams. “Nobody’s called. Nobody’s visited. Nobody’s come to the door or even sent a text message or an e-mail. We have found all of our politicians to be non-engaging, and that’s from the Biden administration all the way down to some of our local politicians.”

The fate of this place and its people seem to be hanging in the balance. But it doesn’t have to be that way, says Dana Brown of the Next System Project. Brown believes that saving the Morgantown plant and its generic drug manufacturing capacity is a vital public interest. If the Defense Production Act isn’t intended for a moment like this, and a place like West Virginia, already experiencing mounting pressure on a shrinking middle class; if it isn’t intended for a public health sector that needs a domestic source of affordable generic drugs and an economy that’s already dangerously dominated by monopoly power… then what is the Defense Production Act intended for?

“In the [2008] economic crisis,” Brown notes, “the government intervened to break up banks and even take them into public ownership for periods of time.… Almost every industry in the country has been touched by public ownership at one point or another. Even pharmaceuticals during the first world war, we took parts of Merck and Bayer companies because they were seen as strategic assets.” Why not Mylan? she asks..

It’s not as if taxpayer dollars aren’t already being spent. The purchase of pharmaceuticals by Medicare, Medicaid, the Veteran Health Administration, and through provisions of the Affordable Health Care Act sends billions of public dollars through both the West Virginia plant and Viatris’s global operations. Viatris’s accruals for Medicare rebates, Medicaid, and related state program rebates, totaled $1.2 billion in 2020 and $1.6 billion the previous year according to an Upjohn filing with the SEC.

Taking the Morgantown facility into public ownership would eliminate the middle-man—and save good jobs in an area already reeling from the decline of coal.

The political implications of inaction are obvious. Reminded of candidate Biden’s pledge to protect jobs and combat offshoring, Joe Gouzd scoffs, “The political repercussions that are going to be felt here may not be felt entirely by our [members], the constituents. They’ll be felt by the political people, the political people who are asking for a vote.” Donald Trump carried West Virginia by 38.9 points in November 2020. With 68.62 percent of its vote, this was Trump’s second strongest state, behind Wyoming.

This April, as Census data revealed that West Virginia had seen the largest population drop in percentage terms of any state (6 percent since 2010), the state legislature passed a resolution calling on the governor, Congress, and President Biden to address the Mylan shut down. While nothing came of that, the state did roll out an enticement campaign, urging out-of-state workers to relocate here. “Ascend WV,” a privately funded program, is offering newcomers $12,000 cash to move here and work remotely. But West Virginia has yet to have robust broadband service for the general public. To newly elected Morgantown city councilor Ixya Vega—the first and only BIPOC member of the council—that’s a slap in the face with frightening implications.

“If this plant closes, and the federal government is enticing people from outside of here with benefits to come, there’s going to be a whole lot of furious people here. Furious at newcomers,” says Vega.

In a statement, Viatris said, “We remain committed to treating those impacted fairly and with respect as we also continue to work with West Virginia public officials and others to try to identify viable alternatives for the site outside of the company’s network.“

But Republican Governor Jim Justice said as late as this June that while the state has gone to Viatris with talks of a potential replacement, the company’s new leadership has stalled: “They’ve been difficult to work with.”

With days counting down to July 31, the facility is still not on the market, and Mike Oles, national field director for Our Revolution, suspects Viatris would rather mothball the state-of-the-art factory than see it compete.

“The Biden folks should be raining down holy hell,” says Oles. “It makes no sense.”

Along with the Democracy Collaborative, Social Security Works, United Steelworkers Local 8-957, and others, Our Revolution has written to the Biden administration appealing for federal action to keep the plant open—and for the convening of a commission of diverse stakeholders to devise a better plan for Mylan’s future. As Oles puts it: “If you want to win back West Virginia, you have to show up.”

Editor’s Note: The Laura Flanders Show’s exclusive report on the options for Morgantown premiers at 11.30 am EDT, July 25, on the World Channel and airs on over 270 PBS stations. Check local listings or watch online. Follow @theLFShow for podcast and details.

Thank you for reading The Nation!

We hope you enjoyed the story you just read. It’s just one of many examples of incisive, deeply-reported journalism we publish—journalism that shifts the needle on important issues, uncovers malfeasance and corruption, and uplifts voices and perspectives that often go unheard in mainstream media. For nearly 160 years, The Nation has spoken truth to power and shone a light on issues that would otherwise be swept under the rug.

In a critical election year as well as a time of media austerity, independent journalism needs your continued support. The best way to do this is with a recurring donation. This month, we are asking readers like you who value truth and democracy to step up and support The Nation with a monthly contribution. We call these monthly donors Sustainers, a small but mighty group of supporters who ensure our team of writers, editors, and fact-checkers have the resources they need to report on breaking news, investigative feature stories that often take weeks or months to report, and much more.

There’s a lot to talk about in the coming months, from the presidential election and Supreme Court battles to the fight for bodily autonomy. We’ll cover all these issues and more, but this is only made possible with support from sustaining donors. Donate today—any amount you can spare each month is appreciated, even just the price of a cup of coffee.

The Nation does not bow to the interests of a corporate owner or advertisers—we answer only to readers like you who make our work possible. Set up a recurring donation today and ensure we can continue to hold the powerful accountable.

Thank you for your generosity.

Ad Policy