Medicaid officials said drugmaker Mylan NV, which has been the focus of controversy over its EpiPen pricing policy, bilked taxpayers of a substantial sum by overcharging Medicaid for the life-saving devices.
Medicaid spent $960 million on EpiPens from 2011 to 2015, the Centers for Medicare and Medicaid Services reported. When Medicare Part D is added in, the total goes to nearly $1.3 billion. The total includes 13 percent in rebates, but CMS said the program should have received a 23.1 percent discount plus the difference between the rate of inflation and any price increase since EpiPen is a brand name drug without any generic equivalent.
Mylan acquired the drug in 2007 and has been raising the price steadily since. The price has gone from $100 for a two-pack in 2007 to $608 this year.
“Today’s letter is more evidence that while Mylan irresponsibly raised the price of EpiPen, they were also bilking taxpayers out of millions of dollars,” Sen. Ron Wyden, D-Ore., and Rep. Frank Pallone, D-N.J., said in a statement in response to the CMS finding. “We will ensure taxpayers get their due.”
Mylan had no immediate comment, Bloomberg reported.
The CMS finding was the result of a letter from the Senate Finance Committee sent last month asking whether Mylan manipulated the Medicaid Drug Rebate Program by misclassifying EpiPen as a generic drug. The CMS found that is indeed what Mylan did.
“A review of our records indicates that, prior to 1997, EpiPen was reported as a single source, or brand drug, for the Medicaid Drug Rebate Program,” CMS found. “Since the fourth quarter of 1997, EpiPen has been reported as a noninnovator multiple source, or generic drug. EpiPen is approved under a New Drug Application by the Food and Drug Administration, has patent protection, and has no FDA-approved therapeutic equivalents.
“These facts indicate EpiPen does not meet the definition of a multiple source drug, but, in fact, meets the definition of a single source drug or brand drug.”
CMS said it had provided guidance to Mylan on multiple occasions to no avail.
Mylan paid a $124 million fine in 2009 for misclassifying its drugs and underpaying rebates.