U.S. Rep. Jason Chaffetz (R-UT) sought answers on Tuesday about EpiPen profit margins following revelations that Mylan Pharmaceuticals had dramatically increased the price of the life-saving device since 2007.
Chaffetz, the chairman of the House Oversight and Government Reform Committee, and U.S. Rep. Elijah Cummings (D-GA), the ranking member of the committee, requested the information in a letter to Mylan CEO Heather Bresch.
Chaffetz and Cummings said that they learned that Bresch “omitted key tax assumptions that affect the company’s profit per pack” of EpiPens sold in recent testimony before the committee.
“Specifically, neither your testimony, nor the documents Mylan produced to the committee, clearly disclosed that the company’s profit claim was calculated after factoring in the statutory U.S. tax rate — 37.5 percent,” Chaffetz and Cummings wrote.
Not disclosing tax assumptions that formed the basis for a $100 profit per pack claim despite opportunities to do so before and during the hearing “raises questions,” the legislators wrote.
“During the hearing, Chairman Chaffetz noted that Mylan’s ‘dumbed down financials’ did not make sense without explanation,” the letter states. “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 order to help understand how Mylan prepared information that was supplied to the committee, the legislators requested any documents prepared for the Mylan board of directors about EpiPen profit margins, as well as all documents referring to Bresch’s testimony before the committee.
Additionally, the lawmakers sought all communications referring to Mylan’s tax rate, including documents that show Mylan’s actual tax rate, taxable income and the amount of U.S. income tax paid by Mylan to the IRS.