Drugmaker Mylan will pay $465 million to settle allegations that it overbilled Medicaid for its life-saving EpiPen, ending one of the controversies over the soaring price of the emergency allergy injection.
The settlement with the Department of Justice follows news that EpiPen has been incorrectly classified since late 1997 as a generic product under the Medicaid health program for the poor and disabled.
However, the federal government says EpiPen is a branded drug, meaning Mylan should have been paying Medicaid a far higher rebate under the government’s complex pricing rules. Drugmakers are required to pay Medicaid rebates of just 13 percent for generic products it purchases, versus a 23.1 percent rebate for brand-name drugs, which cost far more.
Members of Congress have recently grilled the Centers for Medicare & Medicaid about the discrepancy and whether it was taking any action, attention that apparently resulted in the settlement announced late Friday.
“I am glad the Department of Justice pursued this so quickly, since the misclassification was an outrage,” Sen. Amy Klobuchar, D-Minn., said in a statement. Klobuchar and several colleagues had requested an investigation by the Justice Department and other federal agencies.