Mylan Inc. has reached a $465 million settlement with the U.S. Department of Justice (DOJ) to resolve an investigation into its controversial classification of allergy treatment EpiPen as a generic drug for purposes of Medicaid rebates. The nearly half-billion-dollar settlement will resolve “all potential rebate liability claims by federal and state governments as to whether the product should have been classified as an innovator drug” subject to larger rebates.
Mylan added that EpiPen has been classified as a generic since before it acquired the product in 2007, a designation that the company said was made in accordance with “longstanding written guidance from the federal government.” The company said it will enter a so-called corporate integrity agreement as part of the settlement, which still needs to be finalized. Sen. Richard Blumenthal, D-Conn., a leading critic of Mylan, has derided the settlement as “a shadow of what it should be.” He said in a statement:
The deal short-circuits investigation and fact-finding necessary to determine the scope of illegality, culpability of individuals and proof of criminal wrongdoing. This settlement is blatantly inadequate, not only in dollar amount, but also Mylan’s avoiding admission of moral and legal responsibility.
Lawmakers have been directing heavy scrutiny at EpiPen’s generic classification for rebate purposes, questioning whether it could constitute fraud under the False Claims Act. The scrutiny began after earlier criticisms of fivefold increases in EpiPen’s price in recent years. The Centers for Medicare & Medicaid Services (CMS) has confirmed that Mylan has been paying 13 percent rebates to the government for EpiPen by classifying as it a generic drug, despite the agency arguing that it should be classifying EpiPen as a branded drug with at least a 23.1 percent rebate. Mylan has claimed it falls under an exemption that allows it to pay the 13.1 percent rebate, since the medication inside EpiPen is off-patent but the device itself is patent-protected. CMS, however, has disputed that assertion.
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.