A Democratic senator on Monday demanded the Department of Justice reject a $465 million settlement with generic drug maker Mylan over allegations it scammed Medicaid out of reimbursements it owed through people using its EpiPen allergy drug.
Sen. Richard Blumenthal, D-Conn., sent a letter to DOJ to argue that Mylan did at least $700 million worth of harm to taxpayers by overpricing EpiPens, and that the settlement officials have reached is not enough of a penalty against the company.
He was referring to allegations that Mylan has bilked Medicaid since acquiring the drug in 2007.
Drug makers pay Medicaid in the form of rebates to help lower the cost of certain products. A brand name drug pays about 26 percent of the average sales price, while a generic pays 13 percent.
But while Mylan considers its drug a brand name product, it has registered the EpiPen as a generic and paid the lower amount. That led to charges that the company wasn’t paying back enough to Medicaid, and is why Blumenthal wants the settlement renegotiated.
“Many state Medicaid offices have yet to calculate the actual overcharges,” he wrote. “This proposed settlement has been reached – inexplicably — without knowing the exact profit Mylan made through these overcharges and requiring Mylan to pay at least that amount in fines and restitution.”
Blumenthal added that Mylan will simply be able to write off the fine on its taxes as a “pre-tax charge” its upcoming quarterly filings, effectively giving the company a tax break. “Taxpayers become losers several times over,” he wrote.
Blumenthal had other problems with the deal, including that it did not require Mylan to admit any responsibility.
“The American people have been rightly outraged by Mylan’s apparent profiteering and price gouging and possible fraud,” he wrote. “DOJ must fulfill its responsibility to fully and fairly investigate the facts, establish intent, and punish wrongdoing to deter present and future bad actors.”
“A settlement that lacks any acknowledgement of responsibility and requires payment smaller than profits made illegally at taxpayer expense is simply unacceptable,” Blumenthal said.
He said a “thorough and timely investigation” is required into whether the company violated the False Claims Act.
“This proposed agreement is a shadow of what it should be — lacking real accountability for Mylan’s apparent lawbreaking,” he wrote. “It short circuits an investigation and fact finding necessary to determine the scope of illegality, culpability of individuals, and proof of criminal wrongdoing.”
