Drug company Mylan NV has agreed to pay $465 million to settle a whistleblower lawsuit alleging the company overcharged the federal and state governments for its emergency allergy drug EpiPen. The settlement comes a year after French drug company Sanofi filed a whistleblower lawsuit under the False Claims Act in 2014. Mylan was accused of cheating federal and state Medicaid programs. Sanofi, the parent company of the largest biotech employer in Massachusetts, Sanofi Genzyme, produces a competing epinephrine auto-injector drug called AUVI-Q.
According to the U.S. Attorney’s Office in Massachusetts, Mylan knowingly misclassified EpiPen, a branded drug, “as a generic drug to avoid paying rebates owed to Medicaid.” The law requires pharmaceutical companies to pay Medicaid rebates of 13 percent for generic drugs and at least 23.1 percent for branded drugs, which cost substantially more than generics.
Analysts estimate that Mylan’s scheme cost the Medicare program more than $700 million over much of the past decade. Accompanying the alleged rebate scam were several drastic price increases for the EpiPen, which cost less than $100 for a pair nine years ago, but now cost more than $600.
Mylan’s outrageous EpiPen price hikes allowed it to collect substantially more from both the Medicaid and Medicare programs. The amount Medicare and Medicaid spent on EpiPens rose to $486.8 million in 2015 from $86.5 million in 2011, an increase of 463 percent.
Sanofi will get $38.7 million of the total settlement as a whistleblower award. This was a victory for the U.S. Attorney’s Office in Massachusetts which said that it “demonstrates the Department of Justice’s unwavering commitment to hold pharmaceutical companies accountable for schemes to overbill Medicaid, a taxpayer-funded program whose purpose is to help the poor and disabled.”
According to the U.S. Justice Department, Mylan entered into a corporate integrity agreement with the Department of Health and Human Services, requiring it to undergo an annual audit of its practices relating to the Medicaid rebate program.
Sources:MSN and RightingInjustice
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