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Wells Fargo and Mylan should have 'smelled something was wrong': Walter Isaacson

Wells Fargo's $185 million settlement over consumer fraud complaints, and Mylan's EpiPen price hikes of 500 percent over nine years were all about corporate greed, said Walter Isaacson, CEO of the Washington-based Aspen Institute think tank.

"[With] the anger in this country against big institutions, against government, against business, this kind of strokes it," he said on CNBC's "Squawk Box" on Monday.

"It makes us wonder why corporate America can't keep its mind on the fact that it's not just about seeing how much money they can make for themselves but seeing how they can serve customers," said Isaacson, former CNN chief and ex-Time magazine editor.

The CEOs of Wells Fargo and Mylan are set to appear at separate hearings on Capitol Hill this week.

Wells Fargo Chairman and Chief Executive John Stumpf appears at before the Senate Banking Committee on Tuesday.


John Stumpf, CEO, Wells Fargo
Scott Mlyn | CNBC
John Stumpf, CEO, Wells Fargo

Stumpf will face questions about the bank's $185 million settlement over charges that employees boosted their sales targets and bonuses by opening accounts for unsuspecting customers.

Last week, Stumpf told CNBC's "Mad Money" he holds himself accountable, but does not plan to resign.

Wells Fargo last Tuesday said it would eliminate retail banking product sales goals, starting next year.

Hours later, CFO John Shrewsberry blamed underperforming employees struggling to meet goals for the lapses. Speaking at a banking conference in New York, he said 10 percent of the 5,300 employees fired were branch managers or more senior staffers.

"[Wells Fargo] should have smelled something was wrong there, just like EpiPen and Mylan should have smelled something wrong with what they're doing: jacking up something that kids need," said Isaacson, author of the best-selling biography of Apple co-founder Steve Jobs.

"When you're doing things like that, I wonder how do you go to sleep that well at night," he added.

Mylan CEO Heather Bresch, daughter of Democratic West Virginia Sen. Joe Manchin, goes in front of the House Oversight Committee on Wednesday over why the cost of lifesaving EpiPens went up so much.

Heather Bresch, CEO Mylan
Michael Nagle | Bloomberg | Getty Images
Heather Bresch, CEO Mylan

Addressing the public outcry, Bresch appeared in August on CNBC in an attempt to justify the repeated EpiPen price hikes from $100 retail in 2007 to more than $600.

Mylan has taken steps to make EpiPens more affordable, including plans to launch a generic at a discount of more than 50 percent and to take half off branded EpiPens through a savings card for eligible users.

"I don't think that they were doing it for any other reasons than simply to make more money right after a bonus structure went in that would have rewarded that for big executives," Isaacson said.

Responding to CNBC's request comment, Mylan said the EpiPen is only one of 2,700 products the company manages, accounting for less than 10 percent of its revenues.

"The targets set forth in the one-time special program were not and are not practically achievable based on pricing of any single product," the company said. "Our business performance is not reliant on any one product or region."

A Wells Fargo spokesperson declined to comment on Isaacson's comments.

Isaacson also discussed the upcoming Cambridge Cyber Summit to be presented by The Aspen Institute, CNBC, and the Massachusetts Institute of Technology. The conference is scheduled to be held on Oct. 5 at Kresge Auditorium on the MIT campus. Register now.