Mylan CEO minimized EpiPen profits in testimony, House panel says
Leaders of the House Oversight Committee want EpiPen maker Mylan to explain why the company’s CEO apparently misled Congress about profits the company claimed for the life-saving EpiPen injection device.
Mylan CEO Heather Bresch repeatedly told the panel last month that Mylan made just $50 in profit for EpiPens sold for more than $300 apiece.
But lawmakers said in a letter released Monday that the figures Bresch cited were calculated after factoring in the 37.5% U.S. tax rate. Before taxes, the EpiPen profit is actually $160 for a two-pack, said committee Chairman Jason Chaffetz of Utah and Rep. Elijah Cummings of Maryland, the panel’s senior Democrat.
“Failing to disclose tax assumptions that formed the basis for the profit per pack claim, despite opportunities to do so before and during the hearing, raises questions,†Chaffetz and Cummings wrote.
Bresch, the daughter of Sen. Joe Manchin, D-W.Va., infuriated lawmakers as she tried to explain steep cost increases of her company’s EpiPens at a Sept. 21 hearing.
Republicans and Democrats grilled Bresch about the emergency allergy shot’s sky-high price and the profits for a company with sales in excess of $11 billion. The list price of EpiPens has grown to $608 for a two-pack, an increase of more than 500% since 2007.
EpiPens are used in emergencies to stop anaphylaxis, the potentially fatal allergic reaction to insect bites and stings and foods like nuts and eggs. People usually keep multiple EpiPens handy at home, school or work, but the syringes, prefilled with the hormone epinephrine, expire after a year.
In almost four hours of questioning, Bresch at times seemed unsure, or declined to answer directly, when asked about the company’s finances and profits. At one point during the hearing, Chaffetz told Bresch that Mylan’s “dumbed-down financials†did not make sense without explanation.
“You know, your numbers don’t add up,†Cummings told Bresch. “And it is extremely difficult to believe that you are making only $50 profit when you just increased the price by more than $100 per pen.â€
Defending the company’s business practices, Bresch said she wishes Mylan had “better anticipated the magnitude and acceleration†of the rising prices for some families.
In their letter, Chaffetz and Cummings asked Bresch to provide information and documents relating to Mylan’s taxes, including the actual rate paid to the IRS for each year since 2007, and a list of the company’s profits and expenses during that time.
Mylan spokesman Nina Devlin said Monday that company officials “remain committed to productive and continued cooperation with the committee, and we intend to respond to their request for additional information.â€
Mylan moved its corporate headquarters overseas to lower its tax burden but operates the business out of Canonsburg, Penn., near Pittsburgh.
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