Mylan CEO Heather Bresch responding to criticism over EpiPen price increases. CNBC screenshot Mylan has not lowered its price of EpiPen two-packs after a firestorm of criticism. What it has done is tout all it says it's doing to make the drug more affordable, like offering to subsidize patients' co-pays.

And Mylan says it has donated 700,000 packs of EpiPens to schools in the past four years. It calls the program (fittingly enough) EpiPen4Schools, and it provides four free EpiPens to each participating school and additional packs at a discount.

This is not pure altruism. Those donations have far-reaching benefits for the company, from tax breaks to marketing and branding.

Tax break

That donation is almost surely tax deductible for Mylan. And it could be very lucrative if the company is able to take advantage of a little-known extra tax break.

Mylan may be able to deduct not just the cost of the EpiPens it gives to schools but also 50% of the difference between its cost and the sticker price.

We don't know Mylan's raw costs of its EpiPens and whether the company counts the intellectual property in the calculation or just its production cost (which could be as low as $3 based on generic estimates), so let's say its cost is $200 and the sticker price is $600.

An EpiPen two-pack. Joe Raedle/Getty Images That means it could deduct the $200 and half the difference between 200 and 600 for a total deduction of $400 a pack.

As it raised the sticker price on the EpiPen in recent years, it may have been able to take bigger deductions on the donations.

"This is a pretty generous rule," said Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center.

There are some big caveats here.

The deduction can't exceed twice what the goods cost the company. And the total deduction can't exceed 10% of the company's taxable income.

And donations to government don't qualify for the double tax break, so Mylan most likely qualifies for the double-deduction only when it donates EpiPens to private schools.

Mylan didn't answer Business Insider's questions about whether it realizes tax breaks for its EpiPens4Schools program, instead sending a boilerplate fact sheet about the "positive impact of the program."

"I can assure you, from what I know of Mylan, they'll take every loophole," Bill George, a senior fellow at Harvard Business School who is the former CEO of Medtronic, tells Business Insider. He said it could be hard to determine from the outside how companies like Mylan do their accounting.

And there are other reasons it's hard to determine exactly how much Mylan benefits from programs like this.

Mylan is complicated

For most of its life, Mylan was a US firm. It was founded in West Virginia in 1961, originally known as Milan. (The company says it changed the name to Mylan to stand out at the bottom of stock tables' lists of companies that start with 'M.')

But Mylan is one of the many pharmaceutical companies that have inverted, changing its registration to a foreign country to avoid US taxes. It's now technically based in the Netherlands, and it managed to have a negative tax rate in the US in 2015. That means it actually made money on its taxes.

It's unclear whether Mylan donates the EpiPen via its US division or the Dutch parent company and where it realizes the tax savings, if any. Harvard's George says Mylan may take the deductions in the Netherlands or could call it a cost of doing business.

Mylan didn't respond to requests for comment on that question. It's possible it already takes advantage of so many tax breaks that it doesn't get much additional benefit from this program.

Guaranteed customer

EpiPen4Schools gives thousands of districts a few free packs of EpiPens. But if the supply is not enough, schools have to purchase more on their own dime, and each pack has an expiration date requiring that it be replaced each year.

"Is this really what schools should be spending their not-generous funds on?" said Adrienne Fugh-Berman, an associate professor in Georgetown University's pharmacology and physiology department.

For a time, Mylan reportedly required schools participating in the program to commit to order only brand-name EpiPens for 12 months, shutting out generic competitors and raising antitrust concerns. In a statement, Mylan tells Business Insider there was "a limited purchase restriction, but such restriction no longer remains."

Nevertheless, the EpiPen4Schools program could be a big brand builder for Mylan, as it faces a potential loss of market share to generic competitors.

Branding

Fugh-Berman of Georgetown likens the company's donation program to free samples at a doctor's office. It introduces customers to the brand.

The drug inside the EpiPens, epinephrine, is old and long off-patent. The product's value comes from the delivery device; it's easier to use than competitors'.

And the company has achieved a branding coup: like Kleenex with tissues and Xerox with copying, the brand EpiPen has become synonymous with epinephrine delivery.

Official White House Photo by Pete Souza Mylan has been so effective at branding that when President Barack Obama signed a bill in 2013 incentivizing schools to stock epinephrine, it was called the "EpiPen Law." Mylan lobbied heavily for that bill.

Why? It helps make EpiPens, and the brand name, ubiquitous. Even if the product is donated, students will grow up with the EpiPen name and device. The few competitors, such as Adrenaclick, barely have a chance.

In a sense, EpiPens4Schools can be seen as a form of advertising. Fugh-Berman calls this kind of marketing, "advertising as education."

Schools in limbo

The Greenville County Schools district in South Carolina operates 91 schools, serving 76,000 students.

Each year, it orders 182 two-packs, which Mylan provides free. The district says Mylan has provided the packs, but it has also indicated that only its current contract is free.

It has to place a new order in October and is waiting to learn whether it will have to pay for that shipment.

Elizabeth Brotherton, a representative for the district, tells Business Insider that paying full price at roughly $600 for each two-pack could cost the district $100,000 annually, though it's likely to at least receive the product at a discount.

'Non-cash philanthropy' is big

Companies have long donated both cash and goods, but noncash donations — such as those through EpiPens4Schools — have increased since the Great Recession.

These donations can boost firms' reputations for social responsibility and do some real good for communities.

"Historically, they'd write a check and walk away from donations or leave it to the charities," Alex Parkinson, a senior researcher and associate director at The Conference Board, told Business Insider. "Now they're becoming far more strategic with their donations."

A report from the Committee Encouraging Corporate Philanthropy and The Conference Board shows noncash giving increasing much faster than other forms from 2010 to 2013.

In 2013, 90% of giving by pharmaceutical companies was noncash, the report said. Of that, nearly 100% was product donations.

Damage control

Martin Shkreli talking to Maria Bartiromo on Fox Business Network. AP Photo/Richard Drew Of course, EpiPens4Schools predates the recent controversy over Mylan's price increases.

The criticism comes after Valeant and Martin Shkreli became notorious for their pricing practices.

George of Harvard said Mylan was in a different category. Yes, it does all it can to minimize its taxes and maximize its profits, but he said it was trying to hold onto the high prices as long as it could before generics steal market share.

What Mylan didn't anticipate was that it would become the new target of public scorn for pharmaceutical companies.

"This is not Valeant or Theranos," George said. "It’s not the best company, but it's a quality company."