Mylan to Settle EpiPen Overpricing Case for $465M
nytimes.com
nytimes.com
For people talking about throwing executives in jail, see: http://caselaw.findlaw.com/us-11th-circuit/1249868.html ("In a case where the truth or falsity of a statement centers on an interpretive question of law, the government bears the burden of proving beyond a reasonable doubt that the defendant's statement is not true under a reasonable interpretation of the law. United States v. Migliaccio, 34 F.3d 1517, 1525 (10th Cir.1994) (holding that the government bears the burden to negate any reasonable interpretations that would make the defendant's statement correct)").
It's an unusual idea, and frankly it's cruel on the rest of us that we would have to share the same space as these people.
For a specific and kind of mind blowing example the inverter of https://en.m.wikipedia.org/wiki/Polymerase_chain_reaction decided not to become a mult-billionaire as he felt starting a company would be worse for humanity and somewhat sketchy.
On the other hand zuckerberg would not have become a billionaire without several amorale choices. I am not saying he is vastly more evil than the average person, but clearly not the kind of guy you want to have any actual power.
PS: And yes this is backed up by research. https://en.m.wikipedia.org/wiki/Psychopathy_in_the_workplace
That would just give them most time at the office causing more of this!
Also worth quoting from TFA; "The federal government issued a rule this year requiring all companies with drugs that have been approved under what the Food and Drug Administration calls a new drug application to either reclassify them as brand-name drugs or seek a waiver. Mylan had previously said it would seek such a waiver, but on Friday it said it agreed that the EpiPen would be classified as a branded drug beginning in April of next year."
A quick settlement in this case relieves both parties, as by no means was the government in a good position for accepting the lower rebates for decades and just now turning around and crying fowl.
But by all means, populist outcries are fun to watch, lets waive those pitchforks and yell "off with their heads!"
1. http://www.cnbc.com/2016/10/05/mylan-accused-of-bilking-taxp...
with the relevant paragraph:
> CMS "has, on multiple occasions, provided guidance to the industry and Mylan on the proper classification of drugs and has expressly told Mylan that the product is incorrectly classified," Slavitt wrote.
Mylan made claims that were false.
Edit: the alternative is that the $465M payment is a bribe
In a plea bargain, one admits to guilt.
If a company or person can't figure out how to spend their ill-gotten or lottery winning gains, the government will be happy to help.
Keep the money moving.
- Stock Buyback
- Foreign Acquisition, sending the money to a offshore company that a company on paper can make look like its doing some "research".
- Over funding pension schemes and use that money later on to fund investment.
These are just a few examples but companies can do a lot of different things to make it look like the money is moving.
The important things is both the movement and making sure ownership also changes hand from the original investors.
It's like a game of musical chairs for who gets to pay the government a billion dollars this year.
This Epipen case sounds far less bad then most on that list. Especially if we're going to talk about punishment. As most of the other settlements on the list were for mislabeled drugs. People were spending money and wasted weeks/months of their supposed treatment on drugs that didn't help them.
I personally experienced the effects of this due to a bad doctor, not mislabeling, and I was seriously sick for a much longer period of time then I should have been. Fortunately I found a specialist who knew what he was talking about and told me to take one drug which cost $100/m instead of three others costing me $900/m (I didn't have drug benefits insurance at the time). For me the wasted time on a treatment that didn't work was far more harmful to me than the added cost.
In other words, it is completely unrelated, and your overcharging on drugs was awful and again, completely unrelated to this core issue.
I wasn't over-charged for drugs, I was over-prescribed by the doctor - and this shows the danger of being given drugs you're not supposed to have (both wasted money and loss of treatment time). Which was the point of the last two paragraphs in support of my claim that mislabeling is worse than pharma companies over-charging insurance companies (I believe non-insurance holders were offered lower prices by Mylan?). But I could see how my choice of phrasing might have been misinterpreted.
If they aren't competent enough for their high-stakes job they should be doing something else where their fallibility isn't harming peoples lives. And the inaccurate over-prescribing and was only part of my negative experience with the physician in question.
(Or, if $1.3B was net of the 13% already paid, the gross was $1.49B, the underpayment was $149M and the punitive cost $316M)
However, I assume that they were only paying the wrong discount and that otherwise the calculation included AMP and the price increase penalty. Makes me wonder if there was a penalty applied as well.
So... how is this anything more than the government getting a taste of the spoils fleeced from gouging people who need medical care?
I fail to see what good this does, seems to just incentivize the company to make back another $465M by raising the price again soon as the media hype is over.
Why are they paying the money to the government, rather than refunding those who were harmed by the bad thing.
This just amounts to a tax on the people who bought the pens which will just go to the government funds. The penalty may cause the company to change their behavior, but they still managed to profit from the bad behavior. And those that were overcharged are still damaged by having overpaid.
There really needs to be some common sense applied. The penalty must exceed the profit. Those who are damaged must be made whole, or as close to whole as they can reasonably be made. Anything less is an insult on the public's intelligence.
They are being accused of overcharging Medicaid and Medicare, ie, the government.
465M / (EPS of 1.57 * 534.91M shares) = .5537
In your example, if you legally earned $900MM and then robbed a bank for $100MM, would you be fine if the fine was $500MM when caught?
Unless the idea is that Epi will all of sudden become affordable like it used to be.
A more correct analogy, is that if you make $90K/year at your job, you rob a bank for $10K, you are then are fined $55K.
I'm a cynic and most of the time lawsuits penalizing companies are a joke, but this one is better than most.
The problem I have with this is that companies don't make unethical decisions, people do, and the people who made this unethical decision will probably see feel very little of the fine. Maybe they'll get fired, but they'll still walk away with massive amounts of pay and probably a contractually obligated bonus and severance.
https://www.epipen.com/about-epipen/how-to-use-epipen
http://adrenaclick.com/how_to_use_adrenaclick_epinephrine_in...
I think there is a legitimate concern about the usage being different, but I'm not sure it should prevent it from being substituted.
Perhaps the real problem is Adrenaclick isn't running enough TV commercials.
EpiPen® Auto-injector 0.3 mg (delivering a single dose of adrenaline 300 micrograms), adrenaline 1 mg/mL (1 in 1000), net price:
2-mL auto-injector device = £26.45
2 × 2-mL auto-injector device = £52.90
This is the same product from the same vendor as in the US.
[1] https://www.justproxy.co.uk/index.php?q=aHR0cDovL3d3dy5ldmlk...
Thorough explanation and editorilizing here: http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...
If the law allows it, don't expect companies not to do it. And if the law doesn't allow it, but the regulators never drop the hammer, don't expect people not to do it. If the regulators do have the funding to do their job, look to the legislature to find the problem. And if you invest in this kind of business know what you're getting involved in.
This is outright fraud. The law does not allow it. They purposefully misrepresented their product for financial gain.
I'm not saying it isn't fraud. I'm saying that its par for the course when regulators rarely take action. Mylan got greedy and got slapped. Regulatory bodies in the US are woefully underfunded and this sort of thing is the result. Blame congress.
Of course, because Mylan is a corporation, the majority of shareholders have limited liability, their largest loss due to the actions of the company would be their investment.
You say this as if this was always true.
LLC's are a very recent invention. In the past, shareholders and owners of the company were, in fact, liable.