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Comment by rayiner | Hacker News Reader

For people using the word "fraud." Fraud requires some misrepresentation of a material fact. Nobody at CMS was unaware of what an Epipen was, depending on Mylan's representations about what was in there. This is a fight over whether Mylan should have checked Box A or Box B. There is a reasonable case to be made for both sides. After all, the drug in an Epipen (epinephrine) is generic.

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)").

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I guess it's also worth mentioning that the generic classification "goes back decades, to before Mylan even purchased EpiPen."

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!"

I'd like to see the execs barred from country clubs, and a 2yr ban on playing golf.

What would this accomplish?

It's tongue and cheek deterrent, it's effectively ex-communcaiton from their social circles which is where they get their attaboy/girl encouragement that this is acceptable behaviour. They don't see themselves as part of the hoi polloi, and bending the rules to their advantage is called "smart".

Isn't there something in the U.S. Constitution about prohibiting cruel and unusual punishment?

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.

Why do you assume that it's the social status of the person that drives this behavior? Why do you assume that people "with money" find this behavior acceptable?

They are more likely to. There is a fairly strong inverse relationship between wealth / money and morality. They are many dubious things that will increase your earnings and franking people less willing to do this stuff tend to make less money and come from famalies that made less money.

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

> I'd like to see the execs barred from country clubs, and a 2yr ban on playing golf.

That would just give them most time at the office causing more of this!

Let's just tax wind fall profits and be done with it. Anything over 30% triggers a cashectomy.

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.

There are a lot of ways large companies can get around towards the 30% figure.

- 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.

The fix for that already exists: https://en.wikipedia.org/wiki/Hollywood_accounting

I'm now curious how "Hollywood" rules square with GAAT.

Mylan's quarterly profit margin is 15-20%. 30%+ is Apple territory.

The patent is for the delivery system.

Not only that, if I recall correctly they were simultaneously telling another part of the government (the FDA) that the patent made generic substitutes for the Epipen impossible. The argument that the classification "goes back decades" probably doesn't hold much water, since there were generic substitutes for it once upon a time.

You raise an important point, but the record shows that CMS was aware, and asked Mylan to stop doing this[1]. If your error is pointed out and you continue doing it, that's certainly fraud, no?

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.

Companies often have disputes with the government about the proper classification of something under a law. Just because the government agency states should an opinion doesn't make that a legally binding resolution of the dispute. Indeed, it's likely this settlement is happening because neither side wants to go to court and risk having the question decided against them.

If Mylan truly believes they did no wrong, they would say so and not settle. If the government believed the same, it would not be pursuing the case.

Mylan made claims that were false.

Edit: the alternative is that the $465M payment is a bribe

That's not true at all. People hedge their risk all the time. Do you think that every single person who takes a plea bargain is guilty of the crime they're charged with?

That is a different situation. Mylan says they did nothing wrong, but are transferring $465M anyway. In return, the government will no longer consider the matter in a lawful court.

In a plea bargain, one admits to guilt.

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