Tuesday, September 27, 2016

Mylan Admits It Makes Far More on EpiPens Than It Originally Reported to Congress


By Eric Pianin
September 26, 2016


The company has caused an uproar among lawmakers, consumers and health care policy makers after driving up the list price of the two-pack nearly six-fold since 2007, from $100 to $600. Throughout her testimony to the House Oversight and Investigation Committee, Bresch insisted that Mylan had actually reaped modest profits for the drug dispenser after deducting the costs of health care industry middlemen, research and marketing. She repeatedly blamed the health care system – not Mylan – and said her company cleared only $50 per pen in profit, or $100 per two-pack.

But Mylan admitted on Monday that the EpiPen’s pre-tax profits were actually 60 percent higher than it told Congress, according to The Wall Street Journal. Mylan had added a 37.5 percent U.S. tax rate into the mix while computing its profits. Without that tax-related reduction, the profits on the EpiPen two-pack would be about $160 per pack – much higher than the $100 figure Bresch gave to committee members last week.

The company sells an estimated 4.1 million EpiPen two-packs in this country annually, worth nearly $1 billion in revenues.


Ryan Baum, an analyst with SSR Health, a health-care investment research firm, told The Wall Street Journal that the 37.5 percent tax rate Mylan applied to EpiPen is unrealistic because the company didn’t pay nearly that much tax on its product. He said that Mylan had a low 7.4 percent overall tax rate last year and a “negative effective tax rate” in the United States where the EpiPen was sold.


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