Business Briefs – October 9, 2016

Mylan to Pay $465m Settlement Over Medicaid EpiPen Rebates

WASHINGTON (AP) – Drugmaker Mylan will pay $465 million to settle allegations that it overbilled Medicaid for its life-saving EpiPen, ending one of the controversies over the soaring price of the emergency allergy injection.

The settlement with the Department of Justice follows news that EpiPen has been incorrectly classified since late 1997 as a generic product under the Medicaid health program for the poor and disabled.

However, the federal government says EpiPen is a branded drug, meaning Mylan should have been paying Medicaid a far higher rebate under the government’s complex pricing rules. Drugmakers are required to pay Medicaid rebates of just 13 percent for generic products it purchases, versus a 23.1 percent rebate for brand-name drugs, which cost far more.

Members of Congress have recently grilled the Centers for Medicare & Medicaid about the discrepancy and whether it was taking any action, attention that apparently resulted in the settlement announced late Friday.

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.

Robots? Fat Fingers? U.K. Pound Endures One of Its Worst Days

LONDON (AP) – The British pound endured one of its biggest falls ever on Friday — with some in the markets blaming trading robots or a fat-fingered typo for sending the currency down a precipitous 6 percent in just a couple of minutes.

For one of the world’s major currencies, held as a reserve by countries around the world, that’s a huge move. It’s matched only by the pound’s fall in the wake of dramatic events like Britain’s vote to leave the European Union.

It recovered its cliff-like fall later in the day. Still, that’s a level the currency hasn’t seen since 1985.

U.S. Wholesale Inventories Dip In August, But Sales Improve

WASHINGTON (AP) – U.S. wholesale businesses whittled down their inventories in August, even as sales improved.

The Commerce Department said Friday that wholesaler stockpiles fell 0.2 percent in August from July. Inventories of hardware, electrical equipment, pharmaceutical drugs, clothing and farm products declined. But sales picked up 0.7 percent during the same period, with gains in many of the same categories in addition to autos and groceries.

Wholesalers are still adjusting to a prior slowdown that caused inventory levels to rise relative to sales volume.

U.S. Consumer Borrowing Rises in August

WASHINGTON (AP) – American consumers stepped up their borrowing in August, taking on greater debt in a possible sign of optimism amid stable job growth.

Total consumer borrowing rose $25.9 billion in August to nearly $3.7 trillion outstanding, the Federal Reserve said Friday. Consumer debt is rising at an annual pace of 8.5 percent, the strongest clip since September of last year.

Revolving credit, which covers credit cards, increased $5.6 billion, an annual gain of 7 percent. The category that includes auto and student loans jumped $20.2 billion, an increase of more than 9 percent from a year ago.

After 91 Years, Ford’s Australian Car Production Ends

CANBERRA, Australia (AP) – Ford Motor Co. ended 91 years of car manufacturing in Australia on Friday, with the remaining two Australian car makers due to close their doors next year.

Ford Australia said it built the world’s last six-cylinder, rear-wheel drive Falcon XR6 at its plant in Melbourne and 600 employees lost their jobs.

Ford, General Motors Co. and Toyota Motor Corp. announced in 2013 that they were quitting Australia and shedding 6,600 jobs because of high production costs, distance from potential export markets and increasing competition.

Verizon Cuts Jobs in Stores As Wireless Growth Slows

NEW YORK (AP) – Verizon has cut jobs in stores across the country as it deals with increasing competition in the wireless industry.

Union representative Tim Dubnau estimates that Verizon has cut hundreds or even thousands of jobs.

Verizon spokeswoman Kim Ancin said Friday that stores will have fewer employees but refused to specify the size of Thursday’s layoff. She says estimates of thousands of cuts are “an exaggeration.”