Finance

NY to get $38.5M in settlement over EpiPen underpayments

NY to get $38.5M in settlement over EpiPen underpayments

Mylan agreed to a five-year monitoring program of its Medicaid compliance, and also said it would pay the higher rebate on EpiPens as of April 1, 2017.

Mylan CEO Heather Bresch commented, "As we said when we announced the settlement a year ago, bringing closure to this matter is the right course of action for Mylan and our stakeholders to allow us to move forward".

"This settlement demonstrates the Department of Justice's unwavering commitment to hold pharmaceutical companies accountable for schemes to overbill Medicaid, a taxpayer-funded program whose goal is to help the poor and disabled", said Chad Readler, acting assistant attorney general of the department's civil division.

Last year, Sanofi sued Mylan under the False Claims Act.

Mylan and federal investigators Thursday finalized a $465 million settlement of charges the drugmaker overcharged the government for the injection allergy medication EpiPen. Sanofi is to receive about $38.7 million.

Sanofi, which formerly marketed a rival product called Auvi-Q, will receive almost $38.8 million as a reward from the government.

It therefore subjected such single-source, or brand name drugs, to a higher rebate that is payable to Medicaid and that increases to the extent the price of the drug outpaces the rate of inflation.

EpiPens are easy-to-use devices for injecting epinephrine, used when someone is having a life-threatening allergic reaction.

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In fact, he called out Mylan for not providing records of discussions between it and the Centers for Medicare and Medicaid Services (CMS) about EpiPen's misclassification, and hinted that deeper investigations into Mylan's business practices may be needed.

Between 2010 and 2016, Mylan hiked the price of EpiPen by approximately 400 percent while only paying a fixed 13 percent rebate to Medicaid in the same period. Senate Judiciary Chair Charles Grassley (R-IA) said it appears the settlement "shortchanges" taxpayers.

The DOJ announcement comes ten months after Mylan announced the settlement.

This is not the first settlement that Mylan Inc. has made with the federal government: In 2009, the company did the same in a suit that said Mylan had allegedly overcharged the government for its severe allergy attack rescue device, the Associated Press reported Thursday.

Republican Senator Chuck Grassley of Iowa in a statement called the accord a "disappointment", saying it "looks like the settlement amount short-changes the taxpayers".

As part of the settlement, Mylan will also enter into a "corporate integrity agreement" with the Office of the Inspector General of the Department of Health and Human Services, which mandates that Mylan regularly report about how they are staying in compliance with the law. The drugmaker disclosed an agreement previous year, but government officials wouldn't confirm it until now.

Mylan said the settlement provides for resolution of all potential Medicaid rebate liability claims by the federal government, as well as potential claims by certain hospitals and other covered entities that participate in the 340B Drug Pricing Program. The companies paid back a combined total of $124 million.