Senators are joining calls for an investigation into whether the Obama administration enabled drug maker Mylan to bilk Medicaid.
The Senate Finance Committee wrote to the Obama administration on Tuesday to examine whether there is enough oversight of the Medicaid Drug Rebate Program, after concerns that Mylan allegedly manipulated the program to avoid having to pay a higher rebate. The senators join a House effort seeking answers on the rebate.
The focus on Mylan comes as furor over the company’s 400 percent price hike of EpiPen grows in Congress.
The dispute centers on the classification for Mylan’s EpiPen, an auto-injector that delivers a life-saving dose of epinephrine for allergy patients in anaphylactic shock.
The drug has been around for decades, but Mylan considers the EpiPen to be a brand-name product. However, for the Medicaid rebate program, Mylan classified the EpiPen as a generic.
“Manufacturer rebates play an important role in helping to offset the ever-increasing costs of prescription drugs to the Medicaid program,” according to the letter.
The distinction is critical as brand-name manufacturers pay Medicaid 23 percent of the product’s average price, compared to 13 percent for generics.
“Medicaid receives a lower rebate for drugs inappropriately categorized as generics,” according to the letter penned by 10 Republican senators on the panel, including Chairman Sen. Orrin Hatch, R-Utah. The letter was sent to the Department of Health and Human Services’ Office of the Inspector General.
The senators called for a thorough review of how the Centers for Medicare and Medicaid Services is overseeing the program and “where changes in policy need to be made to protect the program against these types of vulnerabilities in the future.”
The letter was released a day before Mylan’s CEO Heather Bresch is expected to attend a hearing of the House Oversight Committee.
Bresch’s family ties have been a subject of scrutiny for the CEO as she is the daughter of Sen. Joe Manchin, D-W.Va. A report in USA Today on Tuesday found that might not be the only conflict. Gayle Manchin, Bresch’s mother and Manchin’s wife, spearheaded an unprecedented effort in 2012 to encourage states to require schools to buy EpiPens, the newspaper said. Gayle Manchin was the head of the National Association of State Boards of Education, and Bresch was Mylan’s CEO.
The House and Senate aren’t the only bodies seeking to investigate Mylan. West Virginia’s attorney general on Tuesday asked a court to enforce a subpoena that Mylan turn over documents surrounding the reason behind the 400 percent price hike. The subpoena is related to an antitrust investigation.
New York’s attorney general opened a similar investigation into whether Mylan violated antitrust laws by inserting anticompetitive language in contracts with schools that forced them to buy EpiPens and not competitors.
