Feds finalize $465M Mylan settlement for EpiPen overcharges
Mylan and federal investigators Thursday finalized a $465 million settlement of charges the drugmaker overcharged the government for the injection allergy medication EpiPen.
Resolving an issue that fueled nationwide debate over soaring drug costs, the agreement ends an investigation that found Mylan avoided paying state Medicaid programs higher EpiPen rebates by improperly classifying the brand name drug as a generic medication.
Some federal and local lawmakers criticized the settlement, saying investigators should have pressed for higher penalties.
The drugmaker raised EpiPen prices by roughly 400% between 2010 and 2016, according to federal investigators. EpiPen is a disposable, pre-filled injector that administers epinephrine to counteract severe allergic reactions.
Massive price increases on EpiPens raise alarm
"Mylan misclassified its brand name drug, EpiPen, to profit at the expense of the Medicaid program," said William Weinreb, the acting U.S. Attorney for the District of Massachusetts. "Taxpayers rightly expect companies like Mylan that receive payments from taxpayer-funded programs to scrupulously follow the rules.
Mylan, which disclosed the settlement's size last October, said the agreement resolves all potential Medicaid rebate liability claims by the federal government, along with potential claims by certain hospitals. The deal also allocates funds to Medicaid programs in all 50 states.
Mylan agreed to a five-year monitoring program of its Medicaid compliance, and also said it would pay the higher rebate on EpiPens as of April 1, 2017.
"As we said when we announced the settlement last year, bringing closure to this matter is the right course of action for Mylan and our stakeholders to allow us to move forward," Mylan CEO Heather Bresch said in a formal statement Thursday.
Amid the investigation and criticism of EpiPen pricing, Mylan has introduced an authorized generic version of the medication that the company says costs less than half the wholesale acquisition price of the brand name version.
Mylan's generic EpiPen hits market after fury over dramatic price hikes
Federal investigators said they were tipped to the alleged overcharging in 2014, by Sanofi, a rival pharmaceutical company that paid the higher Medicaid rebates for its own epinephrine auto-injector medication.
Sanofi filed a False Claims Act complaint against Mylan on behalf of the government and as part of the settlement will receive $38.7 million plus a share of the states' recovery.
5 things we learned from EpiPen price hike hearing
Mylan drew widespread criticism last year from consumers, health care providers and public officials for raising the price of an EpiPen two-pack to $600, up from $100 in 2008.
The company's settlement with the government also drew criticism because it included no admission or finding of any wrongdoing by Mylan. Additionally, a May 2016 analysis by U.S. Department of Health and Human Services Office of Inspector General estimated that Mylan's Medicaid overcharges may have totaled $1.27 billion for 2006 through 2016.
Sen. Charles Grassley, R-Iowa, whose office examined the EpiPen issue and posted the HHS Inspector General's estimate, said the settlement "shortchanges the taxpayers" because the financial agreement is far lower than $1.27 billion.
"The Justice Department doesn't say how it arrived at $465 million for a similar time period," Grassley said in a formal statement. "Did the Justice Department consider the inspector general estimate? If not, why not?"
Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc