House panel: My­lan CEO min­i­mized EpiPen prof­its

Daily Local News (West Chester, PA) - - MARKETPLACE - By Matthew Daly

WASH­ING­TON >> 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 per­cent 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 per­cent since 2007.

EpiPens are used in emer­gen­cies to stop ana­phy­laxis, the po­ten­tially fa­tal al­ler­gic re­ac­tions 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.”

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.”

My­lan moved its cor­po­rate head­quar­ters over­seas to lower its tax bur­den but op­er­ates the busi­ness out of Canons­burg, Penn­syl­va­nia, near Pitts­burgh.

“You know, your num­bers don’t add up.” — Rep. Ja­son Chaf­fetz of Utah, to My­lan CEO Heather Bresch

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