When Mylan’s CEO Heather Bresch went in front of Congress last week to defend her company’s 600 percent raising of the life-saving EpiPen, she made a claim that Mylan only profited $100 per two-pack of EpiPen after taxes and all. Of course, some people began to wonder about Mylan’s use of the word “taxes.” Only a couple of weeks earlier, it became rather clear that Mylan, like many big corporations, don’t really like to pay taxes. Ms. Bresch’s assertion that EpiPen’s profit was taxed was based on the idea that Mylan might actually pay a meaningful tax rate. They don’t.
Without a tax-related reduction, the pharmaceutical company's profits on the EpiPen two-pack would be about $160, higher than the $100 figure the company gave Congress. The company said any lack of clarity was not intentional.
Their bad, guys. Totally unintentional. The CEO sits in front of Congress, gets written about, televised and is allowed to say, with a straight face, that the profit they receive is actually just a little more than half of what they are actually making.
"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 a statement.
The company added, "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(r) Auto-Injector specific costs and associated taxes."
It’s “standard” to underreport profits to Congress.