Members of the House Oversight and Government Reform Committee who heard Mylan CEO Heather Bresch’s testimony last week about the company’s controversial EpiPen pricing now want revised information.
The Wall Street Journal on Monday broke the story that the profit and tax figures Bresch shared with the committee lacked “clarity”:
Bresch said Mylan’s profit was $100 for a two-pack of the injectors, despite a $608 list price.
But in response to questions from The Wall Street Journal, Mylan said Monday that the profit figure presented by Bresch included taxes, which the company didn’t clearly convey to Congress. The company substantially reduced its calculation of EpiPen profits by applying the statutory U.S. corporate tax rate of 37.5 percent—five times Mylan’s overall tax rate last year.
Without the tax-related reduction, Mylan’s profits on the EpiPen two-pack were about 60 percent higher than the figure given to Congress, or $166, it said in a new regulatory filing to the Securities and Exchange Commission [on] Monday. The company said it expects to sell about 4 million EpiPen two-packs in the U.S. this year.
Mylan said it now has provided the House Government Oversight Committee slightly changed and more detailed figures on its EpiPen profits, clarifying that the profit estimate was after taxes.
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FiercePharma.com said Bresch “low-balled” profits and reported that committee members had requested additional information:
The committee demanded internal documents last week that would show just how much, exactly, Mylan profits off of EpiPen. The deadline for those documents—originally requested last month, said Rep. Elijah Cummings, the committee’s ranking member—is Friday.
"We didn't believe Mylan's numbers last week during their CEO's testimony, and we don't believe them this week either, which is why we gave them 10 days from the date of our hearing to produce their internal files," Cummings said in a Monday statement.
Ryan Baum, an analyst with SSR Health, a health care investment research firm, told the Journal that the 37.5 percent tax rate Mylan applied to EpiPen “has nothing to do with reality.”
The Daily News is one of many newspapers that published part of Mylan’s statement about the latest development:
“Tax is typically included in a standard profitability analysis and the information provided to Congress has made clear that tax was part of the EpiPen Auto-Injector profitability analysis,” the company said.
But it does not appear to be standard for Mylan.
The company paid a 7 percent tax rate in 2015, according to a previous SEC filing, after the drugmaker moved its headquarters to the Netherlands. Under its actual tax rate, Mylan’s EpiPen profits are $166 for a two-pack — 66 percent more than what Bresch said.
The company said in a statement that any “lack of clarity wasn’t intentional,” but it did not explain why Bresch did not clarify this distinct before Congress.
Public comments on The Wall Street Journal website blasted Bresch’s leadership. Here’s a sampling:
Not many people held back on Twitter, either:
The home page of Mylan’s website prominently features a picture of EpiPen packaging. It brings visitors to an “EpiPen Resources Page” that offers links to Bresch’s congressional testimony last week:
We don’t know whether PR pros have suggested that Bresch apologize for the debacle. However, Daniel Kozarich, a senior pricing consultant for Vendavo, a consulting firm that advises companies on pricing, opined on Fortune:
As the CEO of the drug maker that sells the EpiPen allergy-reaction injector defended the company’s six-fold price increases before Congress last week, it’s appalling to see that Heather Bresch took no fault. The company’s price hikes on a life-saving drug is clearly unethical if we take a closer look.
For now, crisis communicators, pharma executives and lawmakers will all be watching Friday’s news to learn more about the documents Mylan has been ordered to provide.
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