Mylan may have overcharged taxpayers by $1.27 billion for EpiPens, HHS says

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EpiPen auto-injection epinephrine pens manufactured by Mylan NV pharmaceutical company are seen in Washington

EpiPen auto-injection epinephrine pens manufactured by Mylan NV pharmaceutical company for use by severe allergy sufferers. Photo by Jim Bourg/Reuters

Mylan may have overcharged taxpayers as much as $1.27 billion over 10 years for its signature EpiPens, according to an analysis released Wednesday by the Department of Health and Human Services’s watchdog.

The pharmaceutical company has been in hot water for potentially misclassifying its signature epinephrine auto-injector in a way that enabled it to charge a higher price to Medicaid. Because the pens were classified as generic, rather than brand-name products, Mylan paid Medicaid a 13 percent instead of a 23 percent rebate — despite the company being told its classification was incorrect. That allegation came to light in the fall.

In October, it was reported that Mylan agreed to a $465 million settlement over these accusations, although the status of this settlement remains unclear.

The new calculation of unpaid rebates underscores earlier concerns that taxpayers may get shortchanged by the proposed settlement. As Sen. Chuck Grassley (R-Iowa) noted in a statement, the $465 million settlement is much less than the $1.27 billion Mylan allegedly overcharged.

Now the first hard estimate of the overcharging, from the Office of the Inspector General for HHS, reveals that taxpayers may have paid as much as $444 million from 2006 to 2014, and $826 million from 2015 and 2016 — amounting to $1.27 billion in all. Letters from the inspector general stress that these estimates are limited because they do not take into account “supplemental rebates” that individual states may have received.

The Department of Justice declined on comment on the settlement Wednesday, saying that “there is no settlement to report.”

This article is reproduced with permission from STAT. It was first published on May 31, 2017. Find the original story here.

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