Mylan has agreed to repay $465 million to the federal government for overbilling for its lifesaving EpiPen allergy antidote.
The settlement comes at the end of an investigation that found Mylan avoided paying state Medicaid programs higher rebates for the EpiPen by improperly naming it as a generic medication.
The Centers for Medicare and Medicaid Services said the company was reclassifying its EpiPen retroactively, beginning April 1. The move, they said, would save hundreds of millions of dollars for the Medicaid program, which covers low-income adults and more than 30 million children.
"Mylan's agreement with CMS to correctly classify EpiPen is a huge win for Medicaid beneficiaries and American taxpayers," said CMS Administrator Seema Verma. "Medicaid will no longer be overcharged for EpiPen, protecting access for Medicaid beneficiaries who rely on this lifesaving drug while saving hundreds of millions of dollars. This announcement puts drug manufacturers on notice that CMS remains vigilant in our duty to protect the integrity of the Medicaid program."
Mylan announced the settlement amount in October, and it does not contain an admission of fault or wrongdoing. Mylan said in a statement that the drug was classified under its previous owner, before it acquired it in 2007. The overbilling tip was sent to federal investigators in 2014 by Sanofi, a company that previously produced a rival allergy medication while paying the higher Medicaid rebates. Sanofi filed a False Claims Act and will receive $38.7 million from the settlement.
The U.S. Attorney's Office in Massachusetts shared news of the agreement Thursday.
"Taxpayers rightly expect companies like Mylan that receive payments from taxpayer-funded programs to scrupulously follow the rules," Acting U.S. Attorney William Weinreb said.
Mylan came under congressional scrutiny in 2016 after news surfaced that the company had raised the price of the medication, a two-pack auto-injector that counters the effect of an allergic reaction, by 400 percent, from $100 in 2008 to $608 in 2016.
"As we said when we announced the settlement last year, bringing closure to this matter is the right course of action for Mylan and our stakeholders to allow us to move forward," Mylan CEO Heather Bresch said Thursday, noting that the company had started offering a generic version of its drug, which is half the price.
Sen. Chuck Grassley, R-Iowa, who had been investigating the price increases, said the settlement was "a disappointment," noting that the Office of the Inspector General at the Department of Health and Human Services found overbilling had amounted to $1.27 billion from 2006 to 2016, and that Mylan didn't correct the false classification for a few years after it was pointed out to them.
"There are serious problems here," he said. "It looks like the settlement amount shortchanges taxpayers."
Rep. Lloyd Doggett, D-Texas, chairman of the Prescription Drug Task Force, echoed similar sentiments and lamented that the Trump administration had not revisited the settlement agreed to under the Obama administration.
"This sorry settlement amounts to a shocking $800 million gift to a leading price gouger at taxpayer expense," he said. "It insults families who have been crying out for relief from Mylan and is an affront to taxpayers. Once again, the Trump administration adds another brick to the wall of broken promises, letting one of the companies that Trump said are ‘getting away with murder' keep so much of its ill-gotten gains."