Mylan Profits a Reported $160 on Every EpiPen Pack – 60 Percent Higher Than the CEO Claimed
Congress is asking Mylan CEO Heather Bresch to clarify her statements after she claimed the company makes just $100 on a two-pack of EpiPens, reportedly 60 percent lower than Mylan's profit reported by The Wall Street Journal.
Bresch told the Congressional Committee on Oversight and Government Reform that Mylan earns just $100 in profit from each two-pack of EpiPens, which carry a list price of $608, after production and marketing costs. Committee members were unconvinced by that amount, and pressed Bresch to explain how the disparity could be that large.
Bresch later clarified to The Wall Street Journal that the $100 is their profit after taxes, based on the 37.5 percent statutory U.S. tax rate. Before taxes, they would earn $160, or 60 percent more. However, the WSJ explains that Mylan is in fact taxed just 7.4 percent.
Bresch was called to testify in front of Congress following an outcry from the public after Mylan raised the price of EpiPens to $608 for a two-pack in August, a more than 500 percent increase since Mylan took over production for the life-saving product in 2007.
Rep. Jason Chaffetz, a Republican from Utah and committee chairman, called Bresch out during the hearing for using "dumbed down" numbers.
"It just feels like you're not being candid and honest with Congress," Chaffetz said.
A chart that Bresch brought to illustrate the shifting EpiPen prices throughout the years showed that Mylan actually earns $274 in revenue from each two-pack, with an asterisk to explain that the number is before manufacturing costs and "direct EpiPen related" costs.
Bresch said that Mylan "never intended" for the price of EpiPens to rise at this level, and cited the generic two-pack the company introduced Aug. 29, which costs $300, as an alternative.
RELATED VIDEO: EpiPen Maker Under Fire After Hiking Price of Live-Saving Injector to $500
"You're still only making $50 [per pen]," Rep. Stephen Lynch, a Democrat from Massachusetts, said. "I just can't understand that. The numbers don't work, based on the documents you've given us."
Rep. Buddy Carter, a Republican from Georgia and a pharmacist, reminded Bresch that she was under oath before asking, "Is that the truth, $50 per pen?"
"Yes," Bresch said. "Our profit is approximately $50 per pen."
In a statement to PEOPLE, Mylan explained why the number they provided was after taxes, and included the breakdown of their profit they gave Congress, found here.
"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. In fact, Mylan has provided Congress with a detailed analysis of EpiPen® Auto-Injector profitability," Mylan said in the statement.
"It also is important to note that use of a statutory tax rate for the jurisdiction being analyzed (in this instance, the U.S.) is standard. Just as we did not use a blended global tax rate, we also did not allocate corporate expenses associated with running the business, which would have further reduced its profitability. We believe it is most appropriate, and conservative, to focus entirely on EpiPen® Auto-Injector specific costs and associated taxes," the statement said.
