Elizabeth Warren just demanded Mylan come clean about one of the biggest secrets in pharma

Senator Elizabeth Warren has demanded that drug company Mylan's CEO Heather Bresch answer a very uncomfortable question for those in the drug industry.

What exactly is going on with your patient assistance programs?

This question is vital because Bresch and her company are in the midst of a firestorm. Last week consumer rage over a 500% price increase to the company's flagship product, the EpiPen, hit fever pitch. The ubiquitous anti-allergy shot can be lifesaving, and many children are required to purchase a two-pen pack every year.

One pack costs $608. Back in 2007, before Mylan bought the drug, it cost $100. The cost to make the EpiPen still sits at around $3. Bresch, meanwhile, took home about $18 million in compensation last year, and stands to make a lot more if she can substantially increase her company's earnings per share by 2018.

And so on Tuesday Senator Warren sent an eight-page letter to Bresch signed by 20 Senators, including former presidential candidate Bernie Sanders, (D-VT), demanding to know more about Mylan's patient assistance programs.

Last week, Bresch said that the company would expand these programs to give more people access to the drug. This is something you see across the drug industry these days. Warren, however, doesn't buy that.

"These changes will help some customers who are struggling to afford EpiPens. Your discount programs, however, represent a well-defined industry tactic to keep costs high through a complex shell game," Warren wrote in her letter.

"When patients receive short-term co-pay assistance for expensive drugs, they may be insulated from price hikes, but insurance companies, the government, and employers still bear the burden of these excessive prices. In turn, those costs are eventually passed on to consumers in the form of higher premiums."

If the car is smoking...

This isn't the first time Warren has asked about these programs. Back in April executives from Valeant Pharmaceuticals were on the hot seat. Valeant came under fire for its price increases last fall once Congress got wind that it jacked up the prices of two life-saving heart medications, Isuprel and Nitropress, by 525% and 212% respectively.

Valeant said that it would solve this problem, in part, through patient assistance programs. Warren, again, was not satisfied.

"You double the price, even if you get a waiver to the customer, you make a lot of money," Warren said during the Valeant hearing. "What is the return on investment to Valeant on the money you're currently putting into the patient-assistance programs?"

No one could answer.

"Don't tell me you've never done the analysis," Warren continued. "By doing this you ... keep the patient on the more expensive drug and then you ... recoup whatever from the insurance company."

Business Insider has repeatedly asked Valeant about its patient assistance programs as well and has yet to receive any concrete answers about who manages it and how it works.

Look under the hood

In Mylan's case, Warren wants a breakdown of how many people have used Mylan's coupons and programs; how much they save; how many people Mylan expects will save money now that the programs have been expanded; how much discounted EpiPen's have cost insurers; how consumers are directed to these assistance options; details about its EpiPens4Schools program, and more.

One of the most important questions she asked was about how these programs interact with Medicare and Medicaid. The answer should be that they don't.

"It is illegal for consumers covered under Medicare or Medicaid to use the Savings Card, nor can these consumers access EpiPens through the patient assistance program," Warren wrote in the letter.

She got on Valeant's case about this back in April too.

Warren also had important questions about Mylan's new generic version of EpiPen that will be brought to market in a number of weeks.

"Mylan claims that the branded version of the EpiPen and the 'authorized generic' are 'identical,' says the letter. "Given that the $300 generic and $600 branded EpiPen are functionally equivalent, how does Mylan justify the higher price of the branded EpiPen?...Will Mylan commit to not rationing the product or sale of the authorized generic version of EpiPen? "

Solid questions.

Mylan has until September 12 to answer these questions. Rep. Elijah Cummings (D-Maryland) has also requested a House hearing on the matter in September. Tick tock.