Sen. Grassley: EpiPen maker overcharged taxpayers almost $1.3B

American taxpayers may have been overcharged by as much as $1.27 billion over a decade for the anti-allergy device EpiPen, a USA senator said Wednesday.

Grassley has pressed EpiPen maker Mylan and the Centers for Medicare and Medicaid Services (CMS) for documentation and answers on why EpiPen was misclassified under the Medicaid Drug Rebate Program, resulting in overcharges to the states and taxpayers. Chuck Grassley, chairman of the Senate Judiciary Committee, to inform the committee that Mylan may have swindled $1.27 billion from taxpayers over the past 10 years.

By law, pharmaceutical companies must reimburse 13 percent of the total cost of a generic drug that's paid for by Medicaid.

EpiPen's owner, drugmaker Mylan, had previously agreed to pay the government $465 million to settle claims that it overcharged the Medicaid system. Taxpayers ended up with a bigger bill.

Only two days after CMS confirmed the misclassification of EpiPen, and before it could determine the true amount and extent of Mylan's overcharging, the drug company revealed the $465 million DOJ settlement in a regulatory filing with the Securities and Exchange Commission. According to The New York Times, the figure is almost 3 times the proposed settlement announced by Mylan in October. "Taxpayers have a right to know what happened here and to be repaid whatever they are owed".

Mylan took heat previous year for raising the price of the EpiPen six-fold to a total of $600 for two pens. The drug is used to save the lives of people with severe allergic reactions.

The company faced criticism earlier in 2016 over a price hike on the injectors.

Glassley blamed the Obama administration for not correcting the payment error and said the government "needs to do a much better job of holding companies to their commitments in federal health care programs".

"During Mr. Coury's long tenure, Mylan has delivered strong financial performance and shareholder growth, and his new compensation structure continues to be aligned with the [company's] stock performance while providing shareholders with the benefit of his continued leadership and guidance in setting Mylan's strategic direction", the company said. Drugs can be classified as either brand name or generic by the pharmaceutical companies, and they pay rebates to the program accordingly. In addition, if the EpiPen had been classified as a brand-name product, Mylan would have been required to pay inflation-related rebate amounts for the EpiPen if its price increased faster than the rate of inflation.

  • Annette Adams