EpiPen manufacturer Mylan has been accused by the chairman of the Judiciary Committee, Senator Chuck Grassley, of deliberately overcharging Medicare and Medicaid by up to $1.27 billion through the use of incorrect classification of their auto-injector devices.
At the core of the scandal is the fact that, by law, pharmaceutical companies have to reimburse 13 percent of the total cost of a drug classed as “generic” when used by Medicaid or Medicare. Name brand drugs have to reimburse 23.1 percent of the total cost—and Mylan classified the EpiPen as generic for years even after being told repeatedly by the authorities that because it had no competitors, the product was not “generic.” EpiPens went from costing $57 in 2007 to costing around $600 in 2016, an indication of the profiteering which the product’s uniqueness could allow.
In his statement, Senator Grassley said he was pressing 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. He has been asking “for months” for a complete accounting of the overcharges and has sought records of communications between CMS and Mylan about the misclassification. “Recently, CMS provided records to the Committee that show CMS told Mylan on several occasions that the EpiPen was misclassified, yet Mylan failed to correct the classification,” the statement continued, adding that “Mylan has repeatedly refused to provide its records of those communications with CMS to the Committee.”
Senator Grassley said, “high prescription drug prices are a major concern across the country. I’m working to advance legislation that would help, including bills to bring more lower cost generic drugs to the market. As part of bringing down drug costs, we have to make sure companies that take part in federal health care programs aren’t gaming the system. Congress has a constitutional responsibility to conduct oversight of the executive branch, and making sure taxpayers don’t overpay for EpiPens or any other drugs in public health care programs is our job. The taxpayers spend billions of dollars on prescription drugs through Medicaid, Medicare and other programs.”
“The fact that the EpiPen overpayment is so much more than anyone discussed publicly should worry every taxpayer. Mylan and the Obama Administration reportedly were close to settling the overpayment for much less than $1.27 billion. CMS recently provided records to the Committee that show Mylan was made aware of the misclassification years ago but did nothing. It looks like Mylan overcharged the taxpayers for years with the knowledge EpiPen was misclassified, and the previous administration was willing to let the company off the hook. The fact that Mylan is unwilling to cooperate and provide documents voluntarily makes me wonder what there is to hide and whether a subpoena is the only way to get to the bottom of this.”
“The government needs to do a much a better job of holding companies to their commitments in federal health care programs…. The taxpayers deserve more from their government and don’t need to give anyone a blank check. I’ll continue to push for accuracy under the Medicaid Drug Rebate Program and for Mylan to produce the requested records to the Committee. Taxpayers have a right to know what happened here and to be repaid whatever they are owed.”
Senator Grassley’s full statement, with links to the HHS report: https://www.grassley.senate.gov/news/news-releases/grassley-latest-estimate-taxpayers-overpaid-127-billion-epipen
