(Credit: AP Photo/Rich Pedroncelli)
EpiPen maker Mylan N.V. has announced plans to implement “restructuring programs in certain locations” as an initial step in a series of actions expected to streamline its global operations.
In a Form 8-K filing with the U.S. Securities and Exchange Commission on Wednesday, Mylan said the company may cut less than 10 percent of its global workforce.”
While the company reported that it currently is developing the details of its overall cost reduction initiatives, a 10 percent workforce reduction could eliminate up to 3,500 as the moves toward “optimizing” its assets.
“Since 2015, the company has made a number of significant acquisitions, and as part of the holistic, global integration of these acquisitions, the company is focused on how to best optimize and maximize all of its assets across the organization and across all geographies,” Mylan said in the regulatory filing.
The company reported that further details will be disclosed as initiatives are finalized, including the estimated amount or range of amounts to be incurred and future cash expenditures associated with those initiatives.
Mylan reportedly already has begun offering voluntary staff reduction packages at its U.S. operations, including enhanced severance.
Mylan has become the latest poster child for pharmaceutical industry price-gouging, for hiking the price of a pair of EpiPens from $94 in 2007, when it acquired the product, to $608 this year, despite making no substantive improvement to EpiPens over that stretch. Meanwhile, analysts and others have estimated that it costs less than $10 to produce one EpiPen.
The company in October said that it has agreed to pay $465 million to settle allegations that it overbilled Medicaid for EpiPen. At issue was whether the product should have been classified as generic under a Medicaid program.
In September, a House panel had grilled Mylan CEO Heather Bresch about the skyrocketing cost of the devices, which many parents rely on when their children have allergic reactions.
In nearly four hours of questioning, Bresch often declined to answer directly many questions about the company’s finances and profits, infuriating lawmakers. She defended the company’s business practices and signaled there were no plans to lower prices.
Mylan has said it will begin selling its generic version of EpiPen for $300 for a pair, a move that will still bring the company tens of millions of dollars in revenue while helping retain market share against current and future brand-name and generic competition.
(Sources: Mylan N.V., U.S. Securities and Exchange Commission, Associated Press)
