political uncertainty, but it certainly, i would agree with the finding that it has been weak. consumer sentiment is perfectly solid. we're seeing a lot of strength in consumer spending and consumer sentiment certainly seems to be solid. u.s. tibet scoped for further monetary policy action. i was careful in jackson hole. i indicated we had a number of tools that we've used before and could use again. i did indicate that i do have concerns about the scope for monetary policy. nevertheless, at this point our balance sheet is large and we're not at what we see as the normal level, longer run level of interest rates. so at the moment, the fund rate is very low, it's below that normal level. so at the moment i would say the

zero is a concern and we have less scope than i would like to see or expect us to have in the longer run. now, i think it would be worthwhile for other policymakers to think about what role they could play in addressing negative shocks should they come, and i mentioned specifically automatic stabilizers because i think that's an important way in which fiscal policy serves to cushion shocks to the economy. and it would seem to me, without getting into specifics, that there are ways in which the response of fiscal policy to shifts in the economy could be strengthened, which would help take some burden off monetary policy. >> in the run-up to the brexit

vote earlier this year, several fed policymakers cited it as a reason they were reluctant to raise rates in june, because of the uncertainty related to that vote. in the run-up to the presidential election, i haven't heard the feds say that as a reason they might not raise it in november. can you tell me why the brexit is a greater threat to the economy than the presidential election happening here? also, there were three ascents to this meeting. can you explain what the opposition was? >> what is the right policy to foster our goals, we're speaking of that, and i'm not going to get into policy goals. those are factors we don't consider and i'm not going to get involved in commenting on the election.

in terms of dissents, the notion that we have some accommodation that if we continue on the current path, it's something we will need to remove over time. there is general agreement among participants on that. but the precise timing of what is the right timing for removing that accommodation is something on which we had active discussions, and there are a range of opinions. and the dissents represent a judgment on the part of some of my colleagues that it's important to begin that process now. i certainly agree, and i've said myself, that there are risks in waiting too long to remove accommodation. we need to take a forward-looking approach. i've always advocated making

policy based on forecasts of where the economy is heading and taking account of risks. and there are two particular risks that we need to think about and balance. one is the risk that the economy runs too hot, that employment falls to a too low level, that we need to tighten policy in a less graduated way than would be ideal. at the risk of doing that, because that is a very difficult thing to accomplish, to gently create a bit more slack in the labor market, we could cause a recession in the process. and so that's something my colleagues and i certainly wouldn't want to be responsible f

for. we would like to have an expansion of a labor market to operate for many years to come, and the prospect that we could create downside risk for the labor market is something we would like to avoid. and taking a stitch in time might be essential to avoiding that. on the other hand, inflation is running below our 2% objective and it's also important to make sure we get back to 2%. i have routinely indicated a number of measures of inflation expectations that are running at the low ends of their historical range and we're watching that as well. and there would also be risks from not seeing inflation move back to our 2% objective. and exactly how to balance these two risks, which is more serious, which is a more serious risk, can affect one's judgment about the appropriate timing. and we're all struggling to

understand the magnitude and nature of those two risks. >> rebecca and then we'll go to nancy. >> rebecca jarvis, abc news. chair yellen, at a time when the public is losing faith in many institutions, did the foc discuss the importance of today as an opportunity to dispel the thinking that the fed is politically compromised or beholden to markets? >> the federal reserve is not politically compromised. we do not discuss politics in our meetings. i can't recall any meeting that i have ever attended where politics has been a matter of discussion. i think the public, if they had been watching our meeting on tv today, would have felt that we had a rich, deep, serious, intellectual debate about the risks and the forecast for the economy. and we struggled mightily with

trying to understand one another's points of view and to come out at a balanced place and to act responsibly, and that's my commitment to the american people that i want to lead an institution that is not political and is -- we are striving to do our very best to pursue the goals that congress has assigned to us, which are important ones of price stability and maximum employment. >> does it concern you, given what donald trump has said at this point about the federal reserve that he could go back if he were president and look at the minutes and look for signs of the fed being politically motivated and find them? >> i have no concern that the fed is politically motivated, and i will assure you that you will not find any signs of political motivation when the transcripts are released in five years. we -- i -- it is important that

we maintain the confidence of the public and i do believe that we deserve it. i know that these are difficult decisions, and everybody may not agree with them, but i hope the public will understand that we're striving to do our best to pursue these goals that do matter to all of us. >> nancy marshall with marketplace. you mentioned a commercial real estate. are you worried that bubbles could form in the economy because of our prolonged low interest rates? >> yes. of course, we are worried that bubbles could form in the economy, and we routinely monitor asset valuations. while nobody can know for sure what type of valuation represents a bubble, that's only something one can tell in hindsight. we are monitoring these measures

of valuation and commercial real estate valuations are high. rents have moved up over time, but still valuations are high relative to rents. and so it is something we've discussed. we called this out in our monetary policy report and in other presentations, and we are in our supervision with banks, as i indicated. we have issued supervisory guidance to make sure that underwriting standards are sound on these loans, and we're aware -- this is something also that we look at in stress tests of the larger banks to see what would happen to their capital positions and to make sure they hold sufficient capital. of course, i think the soundness and state of the banking system has improved substantially, but of course we are focused on such

things. >> chair yellen, over here. hi. a quick question on regulation and the scandal at wells fargo over phony customer accounts. i know there are other regulators that have looked into this, but you are also a regulator of wells fargo. has the fed opened a separate investigation into these practices at wells fargo? and wouldn't you, because they do involve issues of consumer protection, potentially of risk management and corporate governance, are you looking at them broadly across the banking system right now? >> so in this specific case, the abuses that took place in the national bank, the controller of the currency has responsibility there. and on the consumer's side, it is the cfpb that has

responsibility. but we work cooperatively and closely with those organizations, and in terms of our overall supervisory responsibility for wells and other large banking organizations, we are very focused and this will be a particular focus of our supervision. going over the compliance environment to make sure that the controls of senior management, oversight of the involvement of the boards of directors are appropriate to control these kinds of risks. we have been distressed to see banking organizations and what

we really want to see are robust procedures to see that employees are always acting in a legal and ethical manner, and that the incentives that are put in place in these organizations are appropriate and don't serve to foster behaviors that could harm the public, and this has been and will be a focus of our supervision. we've seen policymakers begin to have serious discussion about tariffs in the last several decades. if tariffs were to be enacted in the coming year or so, does the fed have an opinion on what that would do to growth in america? >> you know, that's a political issue that's currently being debated that i really don't want to get into. i'm going to pass on that one.

>> hi, john heltman with american banker. back to the question about wells or related to wells. one of the concerns that has been raised that this scandal has raised is the bank itself says it doesn't know what was happening, and there were thousands of employees that were involved in this. some are calling for a breakup, saying that the banks are too big to manage. do you think that -- leaving aside the question of wells specifically, do you think that it's possible for a bank to get so big that it can't be managed and that perhaps the best prudential step would be to break it up? >> so we have high expectations for what we expect to be in place in a large banking organization or any organization. we expect there to be robust systems of management, strong

order functions, a board of directors that is monitoring and supervising and holding senior management accountable for things that happened throughout the organization in a strong compliance environment. i don't think that these are impossible standards to meet. they may be challenging, but at this point i won't arrive at the conclusion that just because an organization is large, it can't live up to those standards and those are our expectations and we intend to hold banking organizations responsible for being put in that kind of compliance environment. so i'm not endorsing a general conclusion that banks are too

big to manage. they can be. it may be challenging and that's what we expect. >> eric, madam chair, thank you. i have a question about the trajectory in the doc plot. while there is currently a large range, the idea is for the fed to raise two-quarters of a point in 2017, and a further two-quarters of a point in 2018 to bring us to two-quarters of 3% in the long run. at the same time, the median forecast for gdp growth is 2% for the next two years and 1.8% thereafter. and i should add the most optimistic projection is for growth of just 2.5% of all the projections outlined here. so if economic growth is going to be that slow for that long, w where will the inflationary forces emerge that would require tightening of 250 basis points

from where we are now, and if not inflation, is there some other explanation? >> so the projections, i agree the projections for growth are slow. we have further written down our estimate of the longer run normal growth rate. and what that reflects is an assessment that productivity growth is likely to remain low for an extended period of time, although it doesn't have an expectation that it will pick up from the miserable half percent rate wii seen over the last five years. slow growth is a factor. slow productivity growth is a factor that influences the longer run normal level of interest rates and writing down the likely pace of productivity

growth is one factor that is responsible for the downward shift in the path that you see for the federal funds rate. that's an important reason for revising down the neutral rate. but now let's go to your -- the part of your question about inflation. in spite of having such slow growth, disappointing productivity growth, we have a labor market that last year generated an average of about 230,000 jobs a month, and so far this year has been generating about 180,000 jobs a month, and that is a very solid pace of job growth and a pace that likely is not sustainable in the longer run, although we've been pleased to see people come back in the labor market, so it certainly is sustainable for some further amount of time.

but i think what ultimately drives inflation, both wage and price growth, is that tightness in the labor market and pressure on resource utilization, and the sad fact is that we are getting that healthy pace of job market growth with very slow growth in output. so this is -- i don't think it bears on the inflation outlook. it has prompted a downward shift in the projected path for the neutral and actual federal funds rate, but it is a huge concern because slow productivity growth ultimately means slow growth in living standards, and that's a big concern that policymakers should be focused on. >> hi. victoria guido with politico. back to wells fargo. obviously this was more of a

consumer finance kind of question, but i wonder if you do think it poses soundness issues as something widespread over the big banks. you mentioned it would be a supervisory focus over the coming year. is there any reason you think might be warranted given these revelations? >> as i mentioned, we are going to be focusing on compliance, risk management and board oversight not only at wells but also across bank holding companies. of course, consumer issues and issues that involve harm of consumers can become safety and soundness issues, and if there was at least one of the lessons from the financial crisis, i think, is that abuses of consumers of this sort that we see -- saw in subprime lending ultimately did become safety and soundness issues, and so of

course we need to have that concern and we'll focus there. i can't really at this point give you specifics beyond that. >> mike derby from dow jones news works. a large number of congressional democrats as well as the campaign of hillary clinton would like bankers removed from the boards overseeing the regional fed banks. also other reformers would like to see the private ownership of the regional -- the bank ownership of the regional feds and that the regional feds be brought fully into government. i wondered what you thought of those two proposals. >> so we have a system that congress did set up in the federal reserve act in which the governance of the reserve banks involves banks contributing capital and serving on the boards of directors. we have long recognized inside

the federal reserve that when we're charged with supervision of banks, that also is a conflict of interest. we have put in place very strong measures to make sure those conflicts of interest are not allowed to play out in any way, that bankers are not allowed to be involved in supervision. dodd-frank changed the arrangement so only the class b and c or nondirecting bankers can participate in the selection of the president as well. so i think -- i want to make sure the public has confidence that in spite of the fact that we do have this banker involvement in our boards of directors that it is not giving rise to any conflicts in our actual conduct of policy.

now, that set up -- if that setup is changed, it raises which -- it's up to congress to decide what to do here. it raises complex issues about the governance, the whole governance arrangement in the reserve banks and the federal reserve. i would simply caution if that is looked at, as congress is entitled to do, they think through carefully what the ramifications of making changes would be. >> karen and then patrick. >> karen with market news international. you mentioned in a previous answer the need to be kbaforwar looking, but you've also pointed to the economy not overheating as a reason you could hold off on raising rates at this one. monetary policy is traditionally operated with long and variable

lags. do you think this timeline has changed since the financial crisis, or due to the use of unconventional tools that the fed used, and how does that factor into your decision making? >> so i think the notion that monetary policy operates with long and variable lags, that statement is due to milt on freedman, and it is one of the essential things to understand about monetary policy, and it is not fundamentally changed at all. and that is why i believe we have to be forward looking, and i'm not in favor of the whites of their eyes sort of approach. we need to operate based on forecasts. but the global economy and the u.s. economy have changed a lot. history doesn't always exactly replay itself. many of the -- those of us sitting around the table, we

learn the lesson that if policy is not forward looking that inflation can pick up to highly undesirable levels, that inflation expectations can be dislodged upward, and the consequence of that can be that endemically higher inflation takes place which it is very costly to reduce. and absolutely none of us want to relive an episode like that, and so i believe -- and my colleagues -- that it is important to be forward looking. we're not going to make that mistake again. but the structure of the economy changes, things do change. the nature of the inflation process has changed, i think, significantly since the bad days of the '70s when the fed had to face this chronic high inflation probl

problem. we've seen inflation respond less to the economy, to movements in the employment r e rate, the curve has become flatter. decision making, inflation expectations appear to be better anchored and perhaps that's been a result of a long period of low and stable inflation. it's something we didn't have in the 1970s. in addition, we have to be attentive to the fact that we've now had a long period in which inflation is actually undershooting our 2% objective, and we see some signs that -- i would conclude inflation expectations are reasonably well anchored at 2%. but we are seeing signs suggesting possible slippage there. and we're a long way from being -- facing the problems that japan faces, but there

always should be a reminder to us that we also would not want to find ourselves in a period where inflation is chronically running below our objective, inflation expectations are slipping, and with a low neutral rate, that becomes more important. so things are changed, but the principle of forward looking absolutely holds. >> patrick? >> hi, patrick, cnn. you just mentioned the economy's major problems, low activity growth, and one of the solutions that's been proposed widely is better job skills. many economists say some workers are staying on the sidelines because they lack new job skills, the ones that would help them attain better employment. the feds don't have the authority to run its own financial program or apprenticeship. would you want that authority from congress, and is it at all frustrating that you and your colleagues know one of the solutions to fixing a major

problem in the economy but you can't take major steps to solving that issue? >> i do think job training and job skills are important. and we do work in community development, trying to -- in the local communities where the reserve banks operate, to try to foster broader understanding of what kinds of programs work and how community organizations and state and local governments can put in place programs that will be helpful. i've recently visited a program that was very impressive in philadelphia. i visited some in chicago and other places, so i do believe it's possible to design programs that will help people overcome obstacles in getting jobs that are available. but i definitely think that, you know, what we can play some role in facilitating understanding of

what works and what doesn't work that can be helpful, it's certainly worthwhile for policymakers at the federal level, at state and local levels, to be focusing on this because i think it is an area that would be helpful in making progress. >> last question. mark? >> thank you, madam chair. as we've gotten to this 4.9% employment rate, we have yet to see substantial wage growth. it seems as if the american middle class continues to express some disappointment about that. is there better news on the horizon? do you think it could come in 2017, for example? and if not, when? >> so i think we have seen some modest pickup in wage growth. it's running a little bit higher than it was over the last two years by a number of important

measures. and we have seen income growth pick up recently. i think the census report was encouraging showing that there are income gains, both because of more jobs and higher paying jobs, and that that's occurring throughout the income distribution. it's helping many families. but i do expect -- we expect the unemployment rate to decline further, we expect labor market conditions to continue to improve, and my hope and expectation is that we will see some further pickup in wage growth and that it will be broadly beneficial to american households. >> thank you. >> and that is federal reserve chief janet yellen wrapping up her news conference on interest rates and the economy after the feds' decision today to hold rates steady. she spoke about an hour and was asked about a number of topics

from what's happening at wells fargo, mike, of course to the outlook of the economy and the feds' own projections released today which, to some extent, go against to provide a fuller view of the statement itself which itself had three dissents. >> that's key. three of the voter members wanted to raise interest rates at this meeting. that's a relatively high number. she said the case for a rate hike this year has strengthened, but we're not there yet. really modest expectations for long term gdp growth in the u.s. >> i should say welcome to the "closing bell." everybody. this is mike, i'm kelly. bill is off today, but we're looking at the feds' decision. in the hours before the feds' decision and the days before, there were people who said maybe they're actually going to raise rates, and that didn't happen. >> a little bit of a subplot that maybe they wanted to reach some kind of control over the narrative. didn't happen.

markets were unmoving, basically. you see the dow there up 131 points. the major index is up more than 3/4 of a percent. the dow composite had an all-time high. the index dollars did back off initially when we didn't get any surprise on the announcement. still lower. that's allowing market stocks to rally in etf form. it seems as if it's a generally buy everything response, and gold is the other one when you have the dollar down and you have this idea the feds will be sidelined for at least a few more months. you have gold rallying at more than 1%. treasurie treasuries, kind of a mild response here. inching up the two-year note, 10-year sticking right behind that mark. >> that did come out of the bank of japan overnight. maybe we'll get to that. >> there you go. japan and germany have 10-year

yields at zero. let's get some more reaction from today's decision from our post-fed meeting panel. joining us today we have dorothy weave weaver of collins capital. our own rick santelli, of course. david, maybe we could start with you. could you put today's decision and statement in the context of where you think the fed is in terms of achieving this very, very slow tightening effort that they're having to weigh right now? >> yeah, good afternoon, everyone. i think the story line for me in reading the text of the statement as well as looking at the sep forecast is there were sufficient cuts to their forecast for the feds' funds rate in 2017 and 2018 and we see 2019 for the first time. the feds keep slashing its funds rate forecast. it's got slow growth, it's got low rates, it's got a labor

market which it sees as still containing slack and being able to bring people back into that seems to be janet yellen's number one goal. she's in no hurry, and she actually said she just thought current policy was modestly accommodative. that's not crazy accommodative as many out there, so i think that says a lot about where the feds are. >> why are the stocks rallying if there's a sense of, well, even if they didn't go, there should abe movement here? >> it doesn't trust that they'll be raising rates any time soon. now that you put it off, you can't do it in november because that would just be foolish, so now you put it off by a few months. we've all seen q3 macro weakening from where we thought it would be a couple months ago. now we'll have nine months of a really weak economy.

what are the odds that we'll have three really strong ones so we can raise rates? i don't think that's in the cards. >> let's bring in steve. he's just emerging from that press conference. to the point steve was just making here, there is a sense, maybe on the floor, at least, they may say they're getting closer to raising rates, but are they really? >> it's hard to know. it feels like since the brainard speech, and maybe if i looked back, i would have seen this coming, but there is a new metric out there, and that metric is labor slack, and to the extent it is or is not being absorbed. we do know that this notion that the economy has added jobs but the unemployment rate has not declined, this is a new. this is the labor part of the dual mandate. we're waiting for an in appalachian. forget that, because now we're

looking at the labor market, th this, give the labor market more room to run. as long as we're adding jobs and not lowering the unemployment rate, we should keep rates unchanged, essentially. i imagine that there is going to be some case in the next couple months, maybe november, maybe december, to raise once, but this notion of giving the market more room to run. the latest labor out there is a new idea and it's a little bit to process. >> isn't one way to view it, aside from the data the fed might be responding to, if they've adjusted how high they think rates will get to the. in other words, they may not have to be in as much of a hurry to start if they need to have the materials to go. >> i would like to point out that the federal reserve brought

its plane over people. i. i can't show you that graphically. it will be -- if they move lower, even discounting the fed further, but right now the market expectation. >> let's bring in rick from chicago. what is the talk there, rick? >> the target was within a range where 170s were the entire home base. . >> so my guess is that traders will continue to trade the market the way they have.

tough talk, no. i thought he asked a brilliant question and i'm very surprised that the boilerplate answer that she read -- and i thought the best raising rates and used brexit for a reason. i thought her answer was rather lacking. >> dorothy, if you could bring it back, what do you think the investment implications are on the ground right now. you've seen a little more light goi going. where does that leave you without an investor? >> i think investors is a.

these were in a very, very, v y very, so cooking environment it's not designed to find things not in a good place where they are. >> when we see places like biotech, that the fed was focused on them and wanted to lean on them. this year we had stanley fisher, many times trying to keep him too floppy. if the emphasis was on slack in the labor market and she was asked continuously about bubbles and she dismissed all of them, is that still a green light here in assets or does it matter if they hike in september?

>> the real move here is the dollar. . what bothers me about the federal reserve right now is the slope iness of their wok. they have they're 2026 loss for unemployment. activity has picked up, yet they cut both d at the central dend ones and also the range. these guys aren't working. if i tried to write a note like this, i would have people calling me and complaining about the note because it doesn't jibe. >> quickly, david, if you could just respond to the idea that the fed just doesn't owe

criticizing the food. i think it's more about what they're going to do? >> that was a horrible approach to life. in if i supposed to be doing? leet focus on what they need to do, and thaet going to help my clients get some money because it doesn't matter. >> i agree with dave here. >>. >> david, we're giving you the last word, sir. then we need to hear the forecast. >> we're really focused on the dollar trade. everything has lined up since april and janet just basically

gave that trade a bigger green light. we like the em the most. >> thank you, everybody, for joining us here in the wake of this meeting and press conference. we really appreciate it. >> thanks. the dow is up 150 now. that's a session high. the nasdaq at these levels ton it be an issue. we'll discuss the pa light might come on. >>. you're watching cnbc, first in business worldwide.

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welcome back. a busy day in washington. we just talked about the federal reserve's decision, but meanwhile just getting sworn in for her testimony before the committee. let's listen in. >> during this period of time, you know the burden on schools from a policy perspective, training perspective. so we gave amounts to various groups, whether it was the national school board, national education for association, national school nurses that we could help and only helping to fund them, train personnel and educate so people could learn how to he's an epipen. my mother has devoted her life to education and rotated one year into the president of the national school board in 2012 and then rotated out.

we have continued to work with these organizations to continue to help train and educate. so while people may want to criticize mylan for having free places to get epipens, i thought it was a cheap shot to bring my mother into this. >> thank you very much. on august 29, the committee sent you a bipartisan request for documents. we included several requests, and i quote, we asked for the company's profits from the sales of epepipen for each year since acquisition, end of quote. do you recall seeing that? >> yes, sir. >> your company has started to row do you say documen produce documents, and we

appreciate that. we now have information about your marketing spentexpenses an number of other costs. but one thing that's absent from your document production is your profits for each year. given how much you are now charging for epipen, i think the american people have a right to know how much you and your fellow executives are making off of these exorbitant prices you're charging for this drug. let's start with last year. how much profit did you make in 2015 from the sale of epipens, in 2015? >> so, sir, what i think we provided as in my testimony is that about $50 per pen is our profit, and that's just direct epipen. it's not taking any kind of company allocation or anything else out of that, other than just direct related epipen cost.

>> do you have a number for me? how many did you sell? >> we sold -- i'll give you roughly over the last 12 months number, roughly about 4 million packs of two. so 8 million pens, but 4 million packs of two. >> and according to the documents, you had net revenues of $912 million in 2015 for epipens, and that was after all rebates and discounts. is that right? >> yes, sir. what we recognize is the $274 per pen. so our revenue is calculated on that average of what mylan receives. >> so according to these documents you spent $970 million on market in 2015 alone. that's a huge amount, and that's what the documents say. so that brings you to a number of about 815 million, wouldn't

you agree? >> sir, i'm not sure what documents -- but what i can confirm is that we absolutely have spent -- we've spent about a billion dollars on epipens since '08. >> the next documents say you spent $255 million on cost of goods sold in 2015, so that brings the total to 560 million. that's pretty simple math. you have assistant-based programs and school-based programs for epipens, but the documents don't say how much you spent on them last year. how much did you spend on those programs in 2015 for epipens? >> sir, i don't have the exact breakout, but like i said, when i took the walk from 274 with cost of goods coming out at $69 which gets you to about the $205 and then down about $105 for

epipen related costs, which is what takes you to the $100 for two or $50 per pen of profit. >> the fellow behind you is getting a chart, and maybe that will help us. >> okay. >> so this is your biggest product, is that right? >> yes, sir. >> you're telling me you don't know how much you spent on assistance-based programs and school-based programs last year? >> i just don't have it broken out. i said about $105 would be epipen related, so all those costs as well as the patient assistant program and everything else we spent -- the disease awareness, we've done quite a bit just on an ifophylaxis itse. the ability to be able to educate, not only is anophylaxis

something that's not only life threatening, but we know 20% of the time when someone goes into anophylaxis, they never had an allergy before, which led us wanting to get it into public places. >> i know we've got some 43 million people, possible customer base. let me ask you this. let's talk about r and d. how much did mylan spend on research and development products, products that directly related to epipens in 2015? >> sir, actually, we've spent over the years trying to do several things that failed -- >> are we talking about 2015. >> we hope that in the next 12 months we'll have approved a new formulation that will extend the shelf life -- >> that's not what i asked you. i asked how much did you spend on r and d in 2015.

and i think the hearing is about epipens, and i got to tell you, you know, i talked in my opening statement about roper doping. that's what i'm feeling like. i feel like you're not giving me answers, ma'am, and i think in fairness to us, you knew what this hearing was about, you knew what our concerns were, and i just -- i'm asking questions -- you're the ceo? >> yes, sir. >> -- that i would think you would know. this stuff should be jumping out the top of your head. >> sir, as a company, mylan spent $750 million this year is what we're projected to spend on r and d. for epipen it's not broken down so much in products. but what i can tell you is our overwhelming majority of what we've spent has been on access awareness programs. as i said, we've been developing

over the years working on smaller, different devices due to patient feedback. what we have been successful in is reformulating it so it has a longer shelf life, and that will extend the time needed between refills. >> hey, can we stop right there? let's put a pen in that one. this longer shelf life, how are we coming with that? right now it's about a year, is that right? >> 18 months. >> 18 months. so how long are we trying to get it up to? i heard it was a year, but i'm glad to hear it's 18 months. go ahead. what are your researchers -- what are you projecting? >> 24 months is what we're hopeful for, and maybe even longer, but a minimum of 24 months. >> how soon will we know, do you think? since you're spending on this money, what are your researchers telling you? how soon do they say they'll have an answer? >> we're looking to submit it within days to the fda. we've been working on this for a couple of years.

it will be with 24 months, but you continue -- after you submit it to the fda, you're able to continue to work on stability, and there is an opportunity that it could go longer. at a minimum, 24 months. >> i'm running out of time. i have only about a minute left. would you agree you've made hundreds of millions of dollars in profit in 2015 based on a sale of epipens alone? >> sir, we have an $11 billion company. i run an $11 billion company, and yes, epipen is our largest product, but by no means driving the entire performance of our company. >> you're not answering the question. you agree you've made hundreds of millions of dollars of profit this year based on the sale of epipens? >> yes, sir. >> i want you to produce to this committee a breakdown for each year for the past 10 years since you acquired this drug in 2007.

i want you to include a detailed list of all your costs for each year, all of your expenses for each year and all your profits for each year for epipen. and that is what we asked for nearly a month ago. the chairman is real big on documents, and i am, too, and we want to -- it makes -- it's very unfair to us when we ask you for documents and we don't get what we want. because what that means is that the hearing is over. as i said before, you fly back to wherever your company is, and we are then -- we have then lost a chance to get the kind of information we need. with that i yield back. >> i thank the gentleman. i will now recognize the gentleman from florida, mr. micah, for five minutes. >> we'll come back to the mylan hearing in just a moment. also ahead, jim graham will weigh in on the federal reserve's decision about an hour

ago to leave interest rates unchanged. the dow continues to rally. it's at session highs 167 points higher with $700 million to buy on the bell and about four minutes to go. we'll be right back. it's not just a car... it's your daily retreat. go ahead, spoil yourself. the es and es hybrid. this is the pursuit of perfection.

welcome back as we return to the hearing of ceo brush.

>> health insurance plans who are uninsured or who pay cash at the pharmacy have faced higher cost for their medicine, is that correct? >> yes. >> and the chairman talked and the staff had talked about the ingredients. it costs about a dollar, is that correct? >> no, sir, we pay $69 for the cost of goods for the epipen. >> $69. >> for two. >> for two. is this your major profit center for the company? >> so, sir, it represents -- >> is this your major profit center -- >> it's our largest product. >> is it your major profit center? >> it's -- we have, like i said -- >> it's your major profit center. >> it's our largest product, but we have -- >> one of the things that concerns us, some people can't

get this for their family, their kids. the prices are high, there isn't competition. and it's also reported that the top five executives within your company earned a collective $292 million from 2011 to 2015, is that correct? >> sir, i think -- >> is that correct? >> i don't -- i didn't go back -- >> what was your salary last year? >> about 18 million. >> about 18 million. it sound like you're doing pretty well on this. how does your compensation compare to peers in your -- in the industry? >> it's in the middle. >> it's in the middle? so there's some with even bigger salaries. >> yes, sir. >> were any of your payments or

executive compensation packages tied to the result of epipen sales? >> no, sir. epipen's performance is a factor in mylan's overall performance, but the board sets the compensation based on the board's overall performance. >> my time is up, but i'll have other questions i'll submit to the witness. >> i think the gentleman's time is expired. i now recognize the gentlelady from the district of columbia, miss norton. >> thank you, mr. chairman. i appreciate this hearing. could i ask you, ms. bresch, after an avalanche of criticism, that is really saying something of any pharmaceutical in recent memory. will you reverse the increase and price of epipens? >> so, congresswoman, thank you. we have by the introduction of a

generic, which has never been done before. an unprecedented event for a brand to make their own from $300. >> that did you in response to the criticism? that's the response from the criticism you got from the public long before you came to this hearing, but nothing about the brand name product? is that right? >> because the way that we can make most immediate impact to the patient -- >> -- would be to reduce the price of the brand name product. >> but that would not be guaranteed to flow through to the patient. what we did was to give immediate relief to the patients that fall under this -- >> that was your concern. this might just not go to the patient, so we will go immediately to -- >> yes, our concern was absolutely that everyone who needs an epipen has one. so putting a generic into the market would, we believe, be the most effective and efficient way to make that happen.

>> i asked staff, because there's been some responses from you about this being only one of your products, how much -- how substantial was epipen. i was amazed by the answer that, and i ask you to verify this, that mylan is 0.3% of the product, a percent of the products you produce but 10% of the revenue. >> epipen is less than 10%, a little less than 10% of our overall production. >> but only 0.3 of the products

that you produce? >> because we absolutely produce billions and billions of doses. u.s. 21 billion doses. >> this turns out to be a minute amount of the products you produce. yet out of that comes 10% of the revenue. what bothers me, when we try -- what we ought to do is compare you with others, because you're certainly not the only one. the ranking member brought up the names of others who have become notorious. but even in that notorious grouping, mylan is 11th in ranking in the drug industry? can you confirm that? >> no, i'm not sure. >> that is our information, and unless you get back to us with different information, 11th in revenue in the entire drug industry, which is perhaps the

most criticized sector of an economy and 16th by market capitalization. and that mylan is paying its executives far more, for example. you have already testified that you earned $18 million. that's last year. i understand you earned $2.45 million in 2007. so you got a hefty increase. but from 2.5 less than 10 years ago to 18 million last year. that's the figure? >> i am blessed and fortunate to have not only financially, but to have worked with this company for 25 years and to -- >> can i ask this? what have you done to earn a 671% increase? what have you done to earn that kind of increase?

>> well, i believe mylan has done a tremendous amount. >> i'm asking what you have done. i'm interested in your compensation. what have you done to earn that kind of an increase, 671% increase, in less than 10 years? >> i would say with starting to save the u.s. in the last 10 years over $180 billion. our products alone have saved this country $180 billion. >> i'm talking about this product. >> i'm talking about mylan, but my compensation -- >> i'm talking about this product, ms. bresch. is your compensation based on what you have done with this product which turns out to be the epicenter of the products you make? i'm trying to find out what you've done with this product that has earned such an increase. >> i would say having 700,000

free epipens across 60,000 schools across america couldn't be more proud about that and hope we can get them in the other 65,000. >> but you, of course, would want another increase. thank you, gentlemen. >> your time has expired. i recognize the gentleman from tennessee. >> thank you very much, mr. chairman, and first of all, i want to associate myself with opening remarks of both the chairman and the ranking member. according to nbc, since it's been brought up by the previous question, according to nbc, ms. bresch made $18,931,600 in 2013 and i suppose it's he's teasy t forget the extra $931,600.

it's disgust to i'm sickened by what i heard here today. i'm a republican and i am really sickened by what i heard about this situation. in my opinion, nobody can really earn or deserves $19 million a year. l ser lest anyone be under a misunderstanding that our free market capitalism hasn't worked here, you don't have a free market, that's the problem. a true free market, you have ease of entry. you certainly don't have that in the drug industry and you have plenty of competition in a true free market and you don't have that here. it's primarily the fault of the fda. i've read article after article. for many years we've let the food and drug administration become so big and so

bureaucratic that it's become almost impossible for a small company to get a drug or a medical device to market. and the cost of getting a drug or medical device to market on average has become, in most cases, over a billion dollars to get a drug to market. and because of that, the drug industry has ended up in the hands of a few big giants. and then i've read article after article that all these giant drug companies and pharmaceutical companies have hired many or most of the former fda commissioners and top-level employees, just like the defense contractors have hired so many retired admirals and generals. what they've done in the drug industry, they've come in and they've manipulated the market. now, ms. bresch justifies all this saying they only get $274 from the epipens.

but these pens were selling by this other company, this german company, for $100 in 2007. we've only had, i think, around 30% inflation in those years and yet they have almost tripled the price that this german company was paying. then congress with good intentions made the situation worse by giving incentives for these schools and grants for -- to get these pens. and then i understand that the new york state attorney general is getting ready to investigate mylan because they have required -- they've given these first pens out for free as marketing devices but then required them to buy the next times they had to buy pens. but what does concern me, one

thing that really concerns me, according to september 1st on npr, as of july they had 538 drug application renewals awaiting approval and the average time wait is 47 months. that doesn't seem very expedited to me. >> that is the ongoing mylan hearing on capitol hill where ceo bresch is under fire on the epipen and how much they have made from it. we'll continue to monitor the hearing as it continues to go on this afternoon. welcome to "the closing bell" here where the nasdaq just closed at a new high, the dell adding about 163 points today. the s&p was up about 103 points

after they decided not to raise interest rates at the latest policy meeting. are they really setting us up for december? welcome, both, and mr. grant, from your eponymous muse letter, gold popping up by 6%, but broadly speaking, what do you think the fed ds as are really here? >> when people start asking who is the fed and what can they know, it will calm down. we've seen the pretense of knowledge or settled pseudoscience. we have seven doctors of economics who basically have been seeing things in the same format, and i think we're

prisoners in a very dubious set of prosecutescientifics. they will find a way not to do something for reasons enumerated. besides, kelly, it might rain on thursday. >> so going back to the dangers lurking and the bond market, because the rates have been incredibly low, you look at what japan has done today, they're now targeting the yields. >> what is most striking is the central bankers almost, if not quite, universal turning away from the truism that is extremely low interest rates induce grave distortions, if profitable ones, in our financial market. so years and years and years ago, the famd. he can stand anything but he can't stand 2%.

meaning rates as low as 2%. he meant positive 2%. we are living in a world of unprecedented lower interest rates. these are five-plus years. look into the camera and say with a straight face that there are no excesses. >> james, i guess i wondered if you had some where the feds would just say, we quit. do you think they're suppressing them, do you think they're propping them up in this world? >> i think they're suppressing them from -- i think we're in a world of low rates because we have a very slowgoing world and a prize, and we have falling

pric prices. but i think we're in the process of burning up an important -- taurng way the confidence. what inflation is umbrella is a loss of consciousness in the currency. that's from people wanting out of it to buy stuff. the people who say there will be no inflation because there has been none is missing the point that there is no leading indicator. there was no inflation in the '60s and '70s until there was, but i think the central bankers are busy chipping away at the unwarranted faith in their pretense. one of the most interesting parts of the statement to me was business-fixed investment has remained soft, and from my perspective, either yellen is bli blissfully unaware or perhaps in denial that the fed has been a key enabler of the fact that businesses don't have the incentive to invest.

it's better for them just to return that capital in a dividend or do a share buyback than to try to make these long-term capital investments that will eventually pay off real dividends, not one-time dividends. >> they say there's trouble, there's something abnormal, something to worry about. this is a state of high anxiety perpetuated in good part by the central banks lo these eight years. my friend wrote the history of interest rates, and i said, dick, tell me, you know these things. has there ever been in 5,000 years a recorded interest rate at this moment? and he said no. all the central banks that have beendoctrinated with new cainism and metrics insist on turning away from this is an

experime experiment. >> home prices could actually never fall. thank you for joining us today. yesterday was john stump and yesterday it was ceo brescht for mylan. all and starting over. propulsion, structural analysis- maple bourbon caramel. that's what we're working on right now. from design through production, siemens technology helps manufacturers meet critical deadlines. i think this'll be our biggest flavor yet. when you only have one shot, you need a whole lot of ingenuity. they said a bottle was just a bottle. that no one would ever notice me.

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welcome back. there is mylan bresch getting grilled on capitol hill about the rising cost of the epipen. >> a pretty heated hearing so far. they talked to doug mort an from the fda and the rising competition on the market. this isn't the first thing we've heard on the hill about rising drug prices, and expressing frustration in his opening remarks. he's pleaded with them to lower the prices of their drugs. here's his opening statements. listen to this. >> after mylan takes our

punches, they'll fly back to their mansions in their private jets and laugh all the way to the bank while constituents suffer, file for bankruptcy and watch their children get sicker or die. >> now, cummings saying it would be nice to hear an apology from mylan's ceo, which we haven't heard, but he said that wouldn't be enough and he wants to see the price being lowered. there was questioning back and forth about what profits mylan sees from the epipen. at one point she even held up a giant posterboard. she was also questioned about her mother, in the role of board of education, had some role of increasing supplies of epipens in school programs. here's her response to that. >> while people may want to criticize mylan for giving free

pens and having access to public places for epipens, i thought it was a cheap shot to bring my mother into this. >> so this is going on now. more questions continuing. really doesn't seem to be slowing down their pace at all, kelly. back to you. >> that is for sure. meg, thank you for now. we're going back to that hearing and listen in. >> there was a time when our resources were not able to keep up with the applications that we were receiving for true generic drug products, not authorized generic, but true drug products approved under the abbreviated drug applications. there was a time in 2012 when we didn't have the backlog. we had over 4400 applications that needed to be reviewed. in 2012, with congress' help, we got additional resources allowing us to hire new individuals, put in place new processes. the result of that have been over 2,200 approvals or

tentative approvals since 2012. so we have, in fact, made progress in reaching conclusions regarding approvals of true generic products. >> what about the markets? are you doing anything to identify markets that are at risk of becoming monopolized by single generic? >> absolutely. we first and foremost agree with everything that's being said today about the power of competition and the importance of us taking that challenge on. us making it possible to develop new products. in particular, when you're talking about products like auto injectors for epinephrine, the public health is even higher. we've done several things specifically about difficult-to-develop products like the epeniphrine energy

product. we've talked about how to put these products on the market efficiently, quickly, how we're going to review the data, the kind of information you need. additionally we meet with any company that comes to us with a product that has this public health value. we offered to meet with them individually, we offered to respond to their questions in writing -- >> i appreciate that. my time is expired, but i would make a statement that if there are companies that are having difficulty, i certainly think the members of this panel would love to hear directly from them and then come directly to you to ask those questions, because we want to deal with this, we want to have the competition, we want to see the price reduced. we don't have hearings like this on a regular basis. i now recognize -- my time sex pi -- sex pi is expired. i now recognize mr. lynch. >> i want to go back to the amount you gave us today.

last year the price was about $460 per two-pack, is that right? so let's go to your chart there. that's not what i have. the documents you gave us are totally deficient in terms of trying to figure out how much you're charging people and how much it costs you, just so you know. i know we have some outstanding document requests for your company, so i really hope you can comply with those as soon as possible to help the committee with its work. so let's even just go off your chart there. $401 one year -- that was 2014? now 530 in 2015 and a whopping

$608 this year so far. how much were you making per epipen in 2014 when you were charging $400? not with the chart. i'm talking about the top price. i'm talking about the overall price. >> we received $235. >> that's not what i'm asking you. can you just answer the question. when you were charging $400 back in 2014, how much were you making? >> equivalent to the approximately $50, it was about $40. >> $40. okay. $40 back then? >> i believe it was approximately -- >> 2015, you went up to $500. how much were you making that

year? >> we received 219 -- >> no, no -- >> and the profit was around $38. >> $38. now it's up to $50 this year? >> approximately. >> so if you're only making $50 this year, you must have been losing money in the previous years because you've gone up $200 in the overall price, the top price, and you're still only making $50. i just can't understand that. the numbers don't work. based on the documents you've given us. >> so, sir, the 6608 is the acquisition cost. then it's approximately $50 a profit off the 274. >> mr. throckmorton -- let me ask you, ms. bresch, you do business with the v snara? i know it's a different

organization. >> yes, we do. >> what's their price? >> i'm not sure. >> they have the ability to negotiate their own drug prices. >> yes, sir. >> it's a hell of a lot less, i bet. >> yes. >> maybe that's what we should do with medicare and medicaid, let them negotiate their prices with the pharmaceutical companies. it was not your intention, but i think you might have helped congress get around an issue by showing the blatant disregard and disrespect you have for people who desperately need this medication. you talk about expanding the ability for people to have the epipen. people in my district can't do it at $608. can't do it. and a lot of those people don't have discounts. they're regular, middle class people. they don't have that discount. and medicare part d, their increases -- i know the access

went up by 164% since you bought the company from merck. but the cost increase are up 1,151% based on a study here that i have from juliett juliette kabansky. i want to enter this in the record without objection. it's disgraceful what's going on here, but in a way you've done us a bit of a favor by just showing you what's wrong with this system, what's wrong with our health care system. i think it's disgusting. i'll yield back. >> the gentleman yields. [ inaudible ] >> thank you, mr. chairman. ms. bresch, i just want to try to get inside the mind of a large drug company ceo for a

minute. when did you guys sit down and decide after 2008 you acquired the epipen, when did you decide to use this model of price increase, and how did you come to that decision? >> it was first recognizing the fact that there is a severe shockingly low understanding of anophylaxis, and there was a shockingly low number of people who were underprepared with epipen. >> so you decided to raise the price? >> no, sir, we continued investing in this product of about $8 billion in this product. >> and how much have you made in eight years? >> it is absolutely our largest product -- >> i just said how much did you make? you said you invested $8 billion. how much did you make? >> i don't have the exact number. >> you know what you spent. do you think you were charging too much. do you think $600 is too much or were you going to keep raising

the price? >> sir, which is why we took the unprecedented action of putting the generic in at $300. >> we'll get to that. but did you plan to increasing the price in 2017? >> no, sir, we did not plan on raising the price. >> you did have a plan to raise it every year for five or six years? >> and if you look at -- >> not "and," i skudasked you a question. did you have a plan to raise the price every six years and then stop? >> we raised the price and what we received, the 274 of the 608, is what we were managing. >> so you think it's fair to raise the price when you got a drug of 100 there a $100, but gn

a drug goes to generic, doesn't the price go down? >> which is why we dropped it to $300. >> only after you jacked it up to 600. if i go buy this tie and they say it's $600, but they're going to sell it to me for 300 that, doesn't make it worth $300. when did you know you were going to release the generic? >> we announced it several weeks ago. >> how did you know as a company? you knew it was coming. it takes months, maybe years. >> sir, we're putting an authorized generic on the market. >> so we're supposed to feel good because you're taking a drug overcharging six times what it's worth and you're going to drop the price to 300? >> sir, we were receiving 274. >> do you think you're charging too much at 600? >> we believe it was a fair price, and we've just now lowered that price by half. >> why did you lower it by half if you thought it was fair? if you thought fit was fair,

leave it where it's at. >> because we wanted to address folks out tlt paying the higher cost. the system wasn't intended for people to pay the hoso acquisition cost and that's what's happening at an alarmingly high rate which we took the step of putting the generic in to sidestep that. >> you're doing everyone a favor by acquiring it at three times the generic. i'm not buying your argument. do you have a guilty conscience about any of this? >> over that period of time, putting it in public places, giving 700,000 free epipens to 60,000 schools and wanting to get into all the public schools across america. >> well, if it costs $20, they could afford to buy their own and you wouldn't have to give them to them. instead you jack the prices up and make everybody feel good about you by saying what you do. instead you took a drug and

profited handsomely by it. i don't have a problem of making money in the free enterprise, but what i do have a problem with, as a physician, when you take drugs and people don't have a choice, they can't go to a different department store to have that tie, they have to get that drug. a mother would cut off her right arm to get that drug. you charged $600, and now you're cutting it back to $300 when that drug is still probably costing three times what it should cost. you can still sit there with a clear conscience to say that's okay and because you're sach good company, you decided to cut the price from 600 to 300? is that your testimony? >> congressman, we want everyone who needs an epipen to have an epipen. >> are you going to lower the price? >> we believe all the programs we put in place, from the generic to the higher patient system program to the co-pay.

so trying to address every facet of patient to make sure they have access to epipens is what we'll remain focused on. >> thank you, gentleman. i want to recognize the gentleman from west virginia, mr. conley, for five minutes. >> ms. bresch, welcome. >> hi. >> i was listening to your earlier formal testimony and i was just struck by what humanitarians you people at mylan really are. and if you listen to your testimony, you would never know what the uproar is about. do you understand the nature of the uproar? >> i do, sir, and i truly believe it's -- the story got ahead of the facts. because i think people had, because of the complexity around the pharmaceutical system, i think that us being able to now really put on the record what we're making, what comes to

mylan and the fact we're making $50 a pen -- >> you'll forgive me, i only have five minutes. i have to manage my time like you have to manage yours. i don't mean to cut you off but i want to get to some questions. let me get this straight in terms of chronology and sequencing. you took over the previous manufacturer in 2007, mylan did, is that correct? >> correct. >> and beginning -- the price of epipen had been fairly stable up to that point, is that correct? >> yes. >> so since 2007, you've raised the price 15 times, if i understood it correctly. about that? >> yes, sir. >> so what happened between 2007 and 2016 different than the previous manufacturer and producer? did production costs skyrocket for you? >> costs of goods increased for sure. >> how much?

>> almost 100%. >> 100%. what was the comparable cost in the price of epipen in that 100% cost increase? >> i'm saying over the last few years. >> and you went from what to what in eight years in what you charged maximum price? i took your point that not everyone pays that. i understand. we have a medical system where we have all different kinds of layers of pricing. but nonetheless, the cost to consumers, what was the comparable increase while you're absorbing in eight years a 100% cost to you to produce, what was the comparable cost in theory to consumers maximum cost increase in that time period that you charged by raising costs 15 times? >> as of today, that's $274 that we received for the epipen. >> i was asking for a percentage increase.

let's do apples to apples. if you're going to contend that production costs went up 100%, what is the comparable price increase for consumers during that time period? in your own testimony, you acknowledged you've raised the price 15 times. >> i believe it's almost 300%. >> so presumably that's profit. >> after -- from that -- >> the delta. >> after the cost of goods come out and then you take out all other epipen related cost. americans are built on profits. profits are an incentive. what i care about is what you charge consumers who don't have any choice. as i understand it, you've gotten a stranglehold on the market. you control 94% of this market, is that correct? >> we have a large market share. you have 94% of the market

share. >> correct. >> i call that a stranglehold, i call it a lot of control. you don't want to call it control, don't. but consumers are experiencing it a little differently. but since you have a stranglehold on the market, you could do what you want in terms of pricing. and you have. >> sir, we've had many competitors in and out of this store. >> your complexities don't even meet 6% of the market. that doesn't even use the one that's at a lower rate. people who risk anophylactik shock don't have a choice. they have to use it. i'm wondering what your sense of social responsibility is to those people. how do you balance -- i'm looking -- i could go through

for you statements you've made and the company has made to annual investors, and it's different than statements made here today. i didn't here the humanism, i heard statements about favorable pricing. i heard statements about how epipen has managed to produce strong results and has made it to double digits to date. >> that's because we were reaching almost double the amount of patients and predicting and having the ability to be prepared with an epipen. we absolutely expanded access and reached to patients who are at risk as well as putting them in public places, like our schools program. >> during the call to investors, one question asked to you was what are the prospects for future prices for epipens? and your answer is, quote, you

should foresee continuing just as we're discontinuing the epipen franchise. if it wasn't reassuring investors that we were going to maximize every opportunity to maximize our profit. again, i don't think profits are a bad thing, but i do think it's a bad thing when consumers exploit it at the risk of consumers who live with it by its price or don't. >> that's why we've taken every step to make sure anyone who needs an epipen has one, whether it's the schools program so that our 700,000 free epipens throughout the 65,000 public schools, and we want to reach the other 65,000 public schools. >> i think my time is running out. but there's sort of this dr.

jek jekyl, mr. hyde response to your answers. i yield back. >> now mr. gowdy. >> thank you, mr. chairman. i'm not a physician, which is why i was consulting in one, and i'm not an expert in economics like mr. mulvaney. maybe you could help me walk through the different change of delivery of name brand drugs over authorized generic. from the manufacturer to the patient, what is the difference in the chain of delivery? >> do you mean in the product or how it's distributed? >> distributed. >> so the supply chain for a generic is different than the supply chain for a brand. >> authorized generic. >> authorized generic and generic would be the same channel. >> okay. >> so the distribution channels do differ primarily given the

fact that generics are for the retail pharmacy, so there is -- the supply chain from a pharmacy manager or the formularies differ quite a bit from the brand to the generic. >> that leads me to another question. i'm sure there is a really obvious answer, but given my background, i don't know what it would be. why don't pharmacies just deal with the manufacturer? if a doctor has to write a prescription and a pharmacist knows what the prescription is for, why is there a middle person in the delivery of drugs? so, sir, on the generics, for many we do deal directly with pharmacies, whether they're large chains or if they're independents -- >> i guess that's my point. if you could do it for generics and authorized generics, why not for name brands, too? >> because most of falls under a

formulary of payers, and pharmaceuticals manage those for formularies or employers. it's tiered. they decide what products can be on a tier 2 or tier 3. so whether it's preferred or not preferred. so they serve as an administrator for most employers. >> the drug middle man serves as an administrator? >> as far as deciding what products they'll reimburse for or what rate they'll reimburse for them. >> well, let me ask you this. is it theoretically possible that your profit margin could increase with an authorized generic as opposed to the name brand drug? >> no, sir, it would be

considerably less. >> walk me through how that would be. you're cutting out the middle man but yet you're making less money. how? >> so there still is, there are still fees and rebates and discounts on the generic side and the generic channel. they're just not as significant. so we're charging, we set a soho acquisition price at 300 and we estimate what would come to mylan would be 200 once you take cost of goods out of that and epipen related cost, it would certainly be less than the 50 there are we talked about today around the profit per pen that mylan receives on the brand. >> i think you answered this question, but i want you to do this again for me because it's important and i want this to be on the record. tell me -- walk me through the cost all the way down to what mylan gets for treating it as a maim brand versus treating it as

an authorized generic. >> sure. so this is the math of -- you can see the wholesale acquisition, the mylan revenue of 274 minus the cost of goods minus the direct cost, which is the $100 or $50 per pen. and what we've said for the generic -- and what we've said for the generic is the wholesteal acquisition would be at 300. mylan received 200, less cost of goods, less epipen related cost. it will be substantially less than $50 of profit per pen that we receive on the brand. >> thank you, ms. chairman. >> just one question. i'm following up on the one he

said. so you would be taking a loss unless i've got my math wrong. when gu you go to the generic a you said you have certain costs, it seems like you would be taking a loss on the generic. am i missing something? >> not a loss, i just said we would be making substantially less than the $50 per pen we're making today. >> i thank the gentleman from south carolina. we're now going to recognize the gentlewoman from illinois, ms. duckworth. >> thank you, mr. chairman. i want to highlight the stories of two families from my district, the brock family, lisa and bob, from rolling meadows have an 8-year-old son brian who was diagnosed with severe food allergies before he turned one. lisa carried an epipen for five years and one day her son started foaming at the mouth and vomiting and her nightmare came true. when he came home from the hospital, he told his mom, mom, i don't want to die. even at five years old, he knew how serious his body's reaction

was, he knew his throat was closing. on this occasion an epipen saved his life. and from shomberg, illinois, she's deeply concerned about the rising prices. her husband and son have life-saving allergies, so they make sure they have two sets at school, at home and in mom's purse. michelle took the time to write to me and urged me to do everything in my power to ensure everyone, even those less fortunate, can protect their children with the same level of care. the brock and hansome families are lucky. they have good insurance. we don't know that they'll always be in this position and one day may not be able to afford the epipen if the costs goes higher and higher. even a risk of one person not

getting this drug is one life too many. i'm going to ask you questions that require short answers. i need you to answer yes or no. earlier you said that epipen has given out over 700,000 epipens to schools across the nation, is that correct? >> yes, we've given free epipens. >> mylan also offers schools discounted epipens for discounted programs, is that correct? >> yes, they can purchase additional pens if they want. >> this is especially important in states like illinois who have laws that require schools to stock epenephrine products. in fact, this is a product in schools that your own mother was instrumental in getting states to adopt in her capacity as president of the national association of state boards of education. so we can better understand the scope of this program, from

august 16 to may 20 of '16, approximately how many schools purchased epipens at the price of $110 >> how many schools have done this? >> i think around 5%. so i think there's been about 45,000 epipens. >> so 45,000 schools -- >> no, no. epipens purchased. >> okay. how many schools? >> i'm not sure. >> answer my question. so the ceo of mylan, you don't know -- you just quoted a number of how many schools you had given them to and how many schools you had not given to and you wanted to get them to these other schools but you can't tell mow p me how many schools have bought epipens? you're so proud of? >> it's a very small number. very small. the 66,000 schools are who we have given free epipens to. >> so i'm also not as concerned about your profit making. i believe in the free market.

what i'm concerned about is your monopolistic practices. and so there is a little confusion in public reporting. could you simply confirm, yes or no, whether schools have purchased discounted epipens had to make any representation and warrants to mylan they would adhere to certain conditions in order to access the discount price that you give them? >> schools did not have to purchase any epipens. >> no, no. the schools that are trying to get the discounted price from you, if they have to certify or make any representations or warrants to mylan, they would adhere to certain conditions in order to get that price. >> for people who wanted to buy it at the discounted rate, yes. but that had nothing -- the free epipens had no -- >> i'm not talking about the free epipen. so i'm holding here -- and mr. chairman, i would like this entered into the record. and please pull this up. it's a certification form -- thank you, mr. chairman. it's a certification form where mylan is actually saying that the school hereby certify that

it will not in the next 12 months purchase any products that are competitive to epipen auto injectors. so you actually put into practice forcing schools and you're so concerned about these kids that you actually are limiting the schools' ability to buy pens from someone else. you're saying we'll sell it for 100 bucks. if you want it for the 100 bucks, you need to sign this and say you can't buy this from anybody else. don't answer. i'm not asking you a question. that's what you have done here. >> well, i disagree with that. because they did not have to buy our pens. >> but if they wanted to get this price -- >> if they wanted a heavily discounted price, yes. >> it was heavily discounted price is $112.10, which is where it was before you jacked up the price to $600! so it's not a discounted price. it's only discounted price because you raised the price on them. before we jacked it up for

profits, here, you need to sign this and say you will not buy this from anybody else. don't -- i'm not asking you a question. this is what you have done. your own document says it. >> they don't have to buy them. and they're -- >> that's right. you don't have to buy them, but your own mother is out there lobbying to make sure they're in all of these schools and the article says that many members of the board of the nasbe didn't even know that there was a founding connection between you and your -- between mylan and your mom through you. she was out there trying to -- passing out your guides for mylan as she was ought there talking to school boards, pushing for these epipens to be put into school districts and then they can't buy it for a lower price. >> i'm sorry, congressman, that is completely inaccurate. >> and then you tell schools you want it at the old price. sorry, you can't buy it at the old price. because we -- unless you promise not to buy it from anyone else. that to me is an unfair monopoly. i yield back, mr. chairman. >> thank you. i recognize the gentleman from texas, mr. tharinfold for five

minutes. >> i think i understand why -- >> tammy duckworth pressing heather bresch hard on connections her family might have had. and we heard earlier bresch saying not to drag her mother into this. nevertheless, the hearing continues. we're going to take a quick break and come right back here on "closing bell." the microsofts stay connected. the microsoft cloud offers infinite scalability. the microsoft cloud helps our customers get up and running, anywhere in the planet. wherever there's a phone, you've got a bank, and we could never do that before. the cloud gave us a single platform to reach across our entire organization. it helps us communicate better. we use the microsoft cloud's advanced analytics tools to track down cybercriminals. this cloud helps transform business. this is the microsoft cloud.

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welcome back. while we've all been fixated on what's happening in washington today, meantime on wall street, a series of earnings come in during the past hour. just want to check on some of those movers after hours. they included bed, bath and beyond, red hat, jane i will circuit. jaib i will down 2%. red hat up by 5.5%. >> red hat kind of biding time for a year-and-a-half. so it seems like better than expected numbers. enough to get the little pop -- little back off its after hours high. bed, bath and beyond missed, tried to reaffirm the whole year. but it's unchanged, so still very much a struggling stock. >> i was going to say, i think that's the bigger issue. a major overhaul to do with that story. and i think that that's one you really need to keep an eye on, because it's a classic value trap, where it's priced right now. but there is so much that needs

to be changed structurally. >> in the meantime, there's been a gap opening between the majorages, between the nasdaq closed at a record high today. >> the nasdaq definitely had a big comeback in the period, people concerned about overall economic growth. you know, it seemed like the market put the old script into production today in terms of, well, we think the fed sidelined, we don't think growth is going to run away from us but the yield is okay. we might as well just buy it off. not so much a dominant high-energy move, 1% markup to the upper end of the range. nasdaq, though, big tech growth is working. >> on the tech side, interestingly enough, not a lot of movement out of the news out of apple. the rumors surrounding the potential purchase of mclaren. not only for them, but also for tesla. you thought maybe that would have an impact to the down side on tesla. and apparently nobody is quite buying or selling on that rumor. >> we had some denials. interesting driving the nasdaq today. microsoft, which isn't -- a

growth story. as it is a capital return story. buyback and dividend. >> i want to talk about the bank of japan. it's just so interesting to me that they have decided to peg the yield on the ten-year japanese government bottom. bernanke even expressed some concerns, saying they multied the message, because they still left this $80 trillion target. so you had both a quantityive number while throwing it out the window saying we have a different target and carol, and i know you're loving this, basically trying to control the yield curve. and it's really shocking that they would even think this is something fathomable. >> something fathomable and you know this has been an area of concern for me for a long time. i think if you look out at japan from a demographic standpoint and what is going to be happening with the continued aging population, a lack of any real immigration to be able to make up for that, and now pegging the yield, i think that this is where, if you have that potential black swan event out there, it easy laily could comem

japan. >> and want to go protect the insurance industry in japan. >> the life insurers getting destroyed by all of this. we'll continue to hand it over to "fast money." carol, mike, thank you for joining us here on "closing bell." that does it for us and "fast money" does begin right now. breaking news at this hour. three huge stories happening out of d.c. tonight and cnbc's live team coverage all over the action. the fed keeping rates unchanged, though signalling closer to a hike. steve liesman has more in just moments. the latest poll on the race to the whitehouse out just now with shocking numbers. john harwood joins us. and meg tirrell fresh from the capitol hill grilling of heather bresch. we start with the biggest story of the day and that was the federal reserve. janet yellen standing pat, keeping rates unchange's, sending stocks surging. straight to steve liesman with the full details. >> yeah, melissa. the federal reserve painting the