A bad rep for biotech?

Mylan and their EpiPen are in the news again after being ousted for cheating the government on tax dollars. They managed submit the EpiPen as a generic, multi use drug, which allowed them to save over 10% on taxes.

The reason why misclassification is a big deal is because brand-name drugs have inflation protections with Medicaid that generics don't. Makers of brand-name drugs have to pay higher rebates to states than generics — 23.1% versus 13%. Also,they have to pay additional rebates if their price increases rise more than inflation.

So by having EpiPen classified as a generic Mylan saved itself a bunch of money. Back in 2009, Mylan paid a $124 million fine for misclassifying its drugs and under-paying rebates this way. It is the responsibility of the manufacturer to maintain accurate information of its drug's status.

With scandals like Mylan and Martin Shkreli flooding the news in the biotech industry and possible regulations coming in the next few years depending on the election, I'm starting to wonder what's in store for the future of biotech. It seems highly unlikely that the government and the public will allow these companies to continue to make people feel cheated out of proper healthcare.

Thoughts?

Via: Business Insider