Mylan agreed to pay $465 million to settle another controversy over its EpiPen epinephrine auto-injector.
As reported in August, the drugmaker is under fire for increasing the price of EpiPen more than 500 percent since it acquired the product from Merck KGaA in 2007. EpiPen currently costs more than $600 per two-pack.
Now, the Centers for Medicare and Medicaid, in response to inquiries by lawmakers, says Mylan classified EpiPen as a “non-innovator,” or generic, drug, instead of as a brand-name drug, and as a result has paid millions less in Medicaid rebates. Drug companies pay rebates to Medicaid at a rate of 23.1 percent for brand-name drugs and 13 percent for generics. In addition, they are not permitted to pass along to Medicaid price increases (beyond the rate of inflation) for brand-name drugs.
Mylan confirmed that it also received an inquiry from the Securities and Exchange Commission regarding the rebates. While the company contends that it merely continued the same classification for EpiPen that Merck was using, it agreed to the settlement without admitting any wrongdoing. According to Mylan, the agreement resolves “all potential rebate liability claims by federal and state governments.”
The company noted that EpiPen will be considered a brand-name drug starting April 1, 2017.
To address the outcry over the price increases, Mylan said several weeks ago that it would enhance eligibility for its patient assistance program, introduce a savings card that would cover up to $300 in out-of-pocket costs, make it possible for patients to order EpiPen directly from the company, and launch a generic version of the auto-injector.