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Blame Game: The $130 Billion in Fees Mylan Says Pushes Up Prices

  • Mylan CEO likely to cite ‘broken system’ in Congress: analyst
  • Drugmakers say rebates aren’t lowering costs as they should

When Mylan NV ’s chief executive office testifies before Congress Wednesday about the company’s EpiPen allergy shots, part of her explanation should shed light on a corner of the U.S. health-care system that drugmakers say drives up prices but is little-discussed outside the industry: rebates.

Those rebates, which are fees pharmaceutical companies pay to distribution intermediaries, are likely to be at the crux of CEO Heather Bresch’s defense: Mylan actually sees only a portion of the $600 list price that has drawn outrage from lawmakers and patients. Bresch will probably point to a “broken system” that incentivizes drugmakers to raise prices in order to secure lower co-pays for their products, Wells Fargo analyst David Maris said.