Pharmaceutical companies Mylan Inc. and Mylan Specialty L.P. have agreed to pay $465 million to resolve claims they violated the False Claims Act by knowingly misclassifying EpiPen as a generic drug to avoid paying rebates owed primarily to Medicaid, the U.S. Department of Justice announced August 17, in a case that generated widespread attention about the rising cost of the anti-allergy EpiPen auto-injection device. Mylan acquired the rights to the shot-delivered medicine in 2007 and then raised the price roughly six-fold.
The Ohio Attorney General says Ohio will receive $19.6 million as part of an EpiPen rebate settlement.
Lawmakers slammed the federal agencies on Thursday for letting Mylan get off the hook too easily with the settlement. Sen.
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Sanofi, which itself has a history of making payments to settle False Claim Act violations, will split the Mylan money with a company that previously received a multimillion-dollar bounty for blowing the whistle on Sanofi.
The regulation is meant to protect taxpayer-funded programs from large price spikes for drugs only available from a single source. That allowed it to pay less in rebates to Medicaid. Doing so, the Department of Justice charged, allowed it to "demand massive price increases in the private market while avoiding its corresponding rebate obligations to Medicaid".
The independent organization will also review all of Mylan's products that are now eligible for Medicaid rebates and make sure that they are classified correctly, which might catch something like a misclassified EpiPen in the future. $234,689.47 will be held by the federal government as the federal Medicaid share.
The company allegedly avoided paying higher rebates by labeling the EpiPen a generic drug rather than a brand-name one.
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According to the government's complaint, Mylan erroneously listed the EpiPen as a generic drug to Medicaid. Mylan Specialty owns the exclusive rights to sell EpiPen in the United States and owns to the New Drug Codes for EpiPen.
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.
"Mylan's agreement with [Centers for Medicare & Medicaid Services] to correctly classify EpiPen is a huge win for Medicaid beneficiaries and American taxpayers", CMS Administrator Seema Verma said in a statement.
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