Congress just gave the maker of the EpiPen another nasty deadline
(AP Photo/Carolyn Kaster)
The headaches will continue at Mylan until transparency improves.
Rep. Jason Chaffetz, a Utah Republican, and Rep. Elijah Cummings, a Maryland Democrat, have sent the maker of the EpiPen a letter requesting additional documents clarifying the company's pricing structure. This after the House Oversight Committee held a hearing with Mylan CEO Heather Bresch that left it with more questions than answers.
That's because the information she brought with her to Washington, DC, was incomplete. Instead of facts and figures she brought cartoonish graphics and numbers that calculated Mylan's profits on the EpiPen using a tax rate that made them inaccurate.
And so Congress stayed mad — and is getting madder. From the letter Chaffetz and Cummings sent:
"Failing to disclose tax assumptions that formed the basis for the $100 profit per pack claim, despite opportunities to do so before and during the hearing, raises questions. During the hearing, Chairman Chaffetz noted that Mylan's 'dumbed down financials' did not make sense without explanation. Ranking Member Cummings similarly stated, 'You know, your numbers don't add up ... 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.'
"In response to scrutiny after the hearing, Mylan clarified that the profit figure you presented to the Committee included taxes. In conjunction with Mylan's SEC filing, a Mylan spokesperson stated that 'the information provided to Congress has made clear that tax was part of the EpiPen Auto-Injector profitability analysis.' Mylan had not directly referenced the tax assumptions for its EpiPen profit estimates, neither in its September 15, 2016, letter to the Committee, nor in the documents that the company produced."
Mylan came under fire in August when it raised the price of the EpiPen, a lifesaving allergy drug, to $608 for a two-pack. When the company bought the drug in 2007, the same amount cost just $100.
(Mylan CEO Heather Bresch testifying on Capitol Hill on September 21 during the House Oversight Committee hearing on EpiPen price increases.AP)
And so all of the documents Congress requested have to do with the gap between the drug's actual cost to Mylan (which hasn't changed much since 2007) and its skyrocketing price. It's a very simple question really: Where does all that money go?
Congress seems to think that a trove of documents including anything prepared for the company's board having to do with the EpiPen, Mylan's tax rate, profits connected to the EpiPen, manufacturer contracts related to the EpiPen, anything related to EpiPen pricing in the Netherlands, and anything having to do with a generic EpiPen could help answer that question.
Drug pricing has become an incredibly opaque and complex system in the US. In a CNBC interview in August, Bresch blamed this complexity and the middlemen that are able to profit from it for EpiPen's price hikes.
That's why over here at Business Insider, we're especially excited to see the following documents requested from Mylan.
From the letter:
"A list of Mylan's profits and expenses relating directly to the sale of EpiPens for each year from 2007 through 2015, including, but not limited to:"
Have fun putting all this together, Mylan. You have until Friday.
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