Mylan underreported EpiPen profits by 60% at Congressional hearing

When Mylan CEO Heather Bresch testified before the House Oversight Committee Sept. 21, she told lawmakers the company makes $100 in profit off a two-pack of EpiPens listed at $608. However, Ms. Bresch failed to indicate this number was estimated after applying a U.S. tax rate of 37.5 percent, reports The Wall Street Journal.

Without the tax deduction, Mylan's EpiPen profits would be about $160, 60 percent higher than the number Ms. Bresch told congress.

On Monday, Mylan gave Congress more detailed information regarding EpiPen profits that acknowledged the figures were after taxes. The company — registered in the Netherlands for tax reasons but run from its operational headquarters in Canonsburg, Pa. — said it was standard protocol to include figures after taxes.

Ryan Baum, an analyst at SSR Health in Stamford, Conn., said the 37.5 percent tax rate Mylan used to calculate profits "has nothing to do with reality" because the company didn't pay that high of a tax on EpiPens. He said Mylan had a 7.4 percent overall tax rate last year and a negative effective tax rate in the U.S., according to the report.

"That implies this notional [$100] profit figure also has nothing to do with reality," said Mr. Baum. While Mylan executives can present financial figures however they please, "good behavior would be to document your figures in a more transparent manner," he said.

 

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