Mylan Reaches Settlement with Department of Justice

In a statement released on Oct. 7, 2016, Mylan said that it had agreed to a settlement with the United States Department of Justice and other agencies over accusations that the company overcharged Medicaid for its EpiPen Autoinjector. This is the latest in a public debate over the price of the drug, which increased more than 400% since Mylan acquired it in 2007.

Mylan said it has settled with the Department of Justice and other agencies for $485 million to resolve questions about the drug’s Medicaid rebate program. Mylan said the settlement “does not provide for any finding of wrongdoing on the part of Mylan Inc. or any of its affiliated entities or personnel.” The settlement resolves any claims by federal and state governments that EpiPen was incorrectly classified under Centers for Medicaid and Medicare Services (CMS). 

EpiPen is classified as a non-innovator, or generic-drug product under CMS. Drugs that are classified as non-innovators by CMS have Medicaid rebates of 13% compared with 23% for innovator products. After rebates, from 2011 to 2015 net Medicaid spending on the EpiPen was approximately $797 million, the Department of Health and Human Services said in a letter. Mylan said EpiPen has been classified as a non-innovator product since the company acquired it. 

The department said there were “questions” about the classification of EpiPen as a non-innovator product, since it dominates the epinephrine autoinjector market and meets the requirements as a branded or innovator drug. CMS reportedly notified Mylan that EpiPen was incorrectly classified, the letter stated. The department also noted that this “incorrect classification has financial consequences for the amount that federal and state governments spend because it reduces the amount of quarterly rebates Mylan owes for EpiPen.” According to a report from the Henry J. Kaiser Family Foundation between January 2011 through June 2015, Medicaid reimbursed 2.7 million epinephrine autoinjector prescriptions, 95% of those reimbursements were for EpiPens.

Source: Mylan, US Department of Health and Human Services, Medicaid, Kaiser Family Foundation