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.
