The last thing a company wants to do is understate their profits to Congress by 60%. That’s what Mylan did, the company which makes the EpiPen.
According to The Wall Street Journal, Mylan is now admitting that it understated the profits it derives from the EpiPen, a life-saving allergy drug, by 60% in a congressional hearing last week.
The pharmaceutical giant had said it made $100 off each $608 two-pack of the drug it sold.
The Journal reported, however, that Mylan “substantially reduced its calculation of EpiPen profits by applying the statutory US tax rate of 37.5%.”
Mylan paid a 7.4% tax rate last year after moving its business to The Netherlands for tax purposes.
“If I could sum up this hearing, it would be that the numbers don’t add up,” Democratic Rep. Elijah Cummings of Maryland said. “It is extremely difficult to believe that you’re making only $50 when you’ve just increased the price by more than $100.”
Mylan told The Journal that it had provided this corrected profit figure to Congress on Monday morning.
Let’s see what unfolds now.
Disclaimer: We have no position in Mylan Inc. (NASDAQ: MYL) and have not been compensated for this article.