Pharma giant Mylan has gotten considerable flak for raising the price of the life-saving EpiPen device more than 500% over the course of a decade. It even settled a lawsuit with the U.S. government for $465 million over overcharging Medicaid, the public health program for low-income individuals. But it doesn’t look like the massive legal payout will affect the company’s top executives.
Had the cost of the settlement been incorporated into Mylan’s adjusted earnings, officials like CEO Heather Bresch would have taken big haircuts in their bonuses, according to the Wall Street Journal. But Mylan’s way of reporting earnings doesn’t actually take such costs into account.
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That’s not exactly an uncommon tactic. But the fact that a millions-dollar settlement, which is nearly half the yearly sales for the EpiPen (by far Mylan’s best-selling and most profitable product), won’t affect executive bonuses is raising some eyebrows.
Fortune has reached out to Mylan for comment on its executive compensation and accounting practices, and will update this post if it responds. But the firm has defended itself by saying that the settlement doesn’t include any definitive evidence of wrongdoing.
That said, it may come as no surprised that Mylan officials don’t appear to be headed for a pay cut at all. Bresch herself told a Congressional committee that she thought the EpiPen’s price hikes were “fair,” and that the company’s various arrangements with state agencies were above board. Not to mention, Bresch pointed out, Mylan has bolstered its patient assistance program and pledged to introduce a lower-priced generic in the wake of the price hike controversy.
Lawmakers appear a bit more skeptical. In fact, Senate Republicans have called for more probes into Mylan’s Medicaid rebates for the EpiPen, and whether or not the company misclassified its product in order to pad its bottom line.
