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Summary: Mylan has agreed to pay $465 million after misclassifying the Epipen as generic and therefore avoiding Medicaid payments.
Last year, the maker of the EpiPen was in hot water for overcharging consumers for the emergency allergy drug; and officials announced on Thursday that the drug manufacturer must pay $465 million to settle a joint state-federal lawsuit.
In 2016, there was a public outcry when EpiPen raised its prices by 400%. EpiPens are emergency allergy treatments, and the government alleged that Mylan had falsely classified the treatments as generic rather than branded from 2010 to 2017 in order to reduce the rebates the company paid to Medicaid. According to Newsday, EpiPens are the most prescribed drug on the market.
“For nearly seven years, Mylan prioritized its bottom line — and shortchanged the Medicaid program and taxpayers,” New York Attorney General Eric Schneiderman said in a statement. “By misclassifying EpiPen, Mylan attempted to sidestep [its] obligations, leaving taxpayers to foot the bill.”
The price hike angered consumers, but action was taken by the government after rival drug maker Sanofi filed a whistleblower lawsuit, according to ABC News.
Medicaid is a health-care program for the poor, and Scheneiderman said that a portion of the settlement will be allocated to the Medicaid programs in all 50 states.
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Mylan admitted no wrongdoing as part of the settlement, and it will reclassify the drug and pay Medicaid rates as of April 2016.
“Bringing closure to this matter is the right course of action for Mylan and our stakeholders to allow us to move forward,” Mylan Chief Executive Heather Bresch said in a statement.
This settlement is the second one that Mylan has made with the government regarding overcharging for its medicines. ABC News reported that a watchdog group criticised the recent settlement for being smaller than what Medicaid was overcharged.
“DOJ is letting Mylan get off on the cheap for ripping off the government, and with no admission of wrongdoing,” Robert Weissman, president of Public Citizen, said in a statement.
Weissman and Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, said the Health and Human Services Department’s Office of Inspector General concluded that Medicaid incorrectly paid Mylan $1.27 billion more than they should have for over a decade. Grassley told ABC News that he had no idea how the amount of $465 million was decided.
In 2007, Mylan raised the EpiPen price from $94 to $608, and experts said that it costs the company about $10 to make one pen. On Thursday, the Department of Justice revealed that Sanofi filed a lawsuit against Mylan using the False Claims Act, which allows companies and individuals to sue over improper charges to government programs and receive a cut of any money recovered. ABC News said that Sanofi is expected to receive $38.7 million from this settlement.
