Mylan NV CEO Heather Bresch holds up a sample of the company's two-pack EpiPen product as she testifies before the House Oversight and Government Reform Committee in Washington, D.C., on Sept. 21. She told the panel Mylan makes $100 in profit from each two-pack but the company said Monday that figure is actually four dollars higher. Photo by Mike Theiler/UPI | License Photo
CANONSBURG, Pa., Sept. 26 (UPI) -- Dutch-based drug maker Mylan N.V. admitted Monday that the company's top executive gave a post-tax figure last week when she told Congress how much profit is made from sales of its life-saving EpiPens.
CEO Heather Bresch told a congressional hearing last week Mylan makes $100 profit from every two-pack of the name brand anaphylaxis injectors it sells. Some members of the House Oversight and Government Reform Committee, though, didn't buy it -- particularly because the EpiPen two-pack had a list price of $608.
Monday, Mylan told The Wall Street Journal that Bresch's disclosure didn't give the whole picture.
The truth is, Mylan said, that Bresch's claim of a $100 profit per two-pack is the figure after applying a 37.5 percent statutory U.S. tax rate. Before the tax, the profit from EpiPen two-packs is around $166 -- more than 60 percent higher than Bresch said.
An extra $66 might not sound like a lot, but it represents a $270.6 million difference -- based on the approximately 4.1 million EpiPen two-packs Mylan sells in the United States.
That's additional profit the company makes from anaphylaxis patients who have just two options in the matter -- buy Mylan's epinephrine autoinjector, or die. Anaphylaxis is a severe allergic reaction that can cause death in certain people if not treated immediately -- the very reason the drug is contained in a portable pen-like autoinjector that patients can use at a moment's notice.
Mylan, though, said Monday that Bresch's post-tax figure wasn't intended to deceive Congress, but rather it is the industry-wide standard when reporting profitability analyses.
The company submitted updated figures to Congress in a regulatory filing on Monday, which boiled down to a post-tax profit of $104 -- or $52 per EpiPen. The $4 post-tax difference between that figure and Bresch's claim last week is $164 million.
"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," the company said in a statement Monday. "We believe it is most appropriate, and conservative, to focus entirely on EpiPen Auto-Injector specific costs and associated taxes."
Some analysts aren't buying Mylan's explanation. Ryan Baum, of SSR Health, told the Journal it was a clear attempt to hide a greedy business practice.
Last year, Mylan sold $1.5 billion in EpiPens that accounted for 40 percent of the company's total sales. It owns a 90 percent market share because it has only one competitor, Adrenaclick.
"You virtually have a monopoly, and used it to your advantage; but unfortunately, it is at the expense of people who need it," Rep. Gerald Connolly, D-Va., told Bresch last week.