Mylan Paying $465 Million to Settle Case About EpiPen Classification

The U.S. Department of Justice announced the settlement Aug. 17 in a case that generated widespread attention about the rising cost of the anti-allergy EpiPen auto-injection device.

Pharmaceutical companies Mylan Inc. and Mylan Specialty L.P. have agreed to pay $465 million to resolve claims they violated the False Claims Act by knowingly misclassifying EpiPen as a generic drug to avoid paying rebates owed primarily to Medicaid, the U.S. Department of Justice announced Aug. 17, in a case that generated widespread attention about the rising cost of the anti-allergy EpiPen auto-injection device. Mylan Inc. and Mylan Specialty L.P. are wholly owned subsidiaries of Mylan N.V., which is headquartered in Canonsburg, Pa.

"This settlement 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," said Acting Assistant Attorney General Chad A. Readler of DOJ's Civil Division. "Drug manufacturers must abide by their legal obligations to pay appropriate rebates to state Medicaid programs."

The settlement provides for resolution of all potential Medicaid rebate liability claims by the federal government, as well as potential claims by certain hospitals and other covered entities that participate in the 340B Drug Pricing Program. The settlement allocates money to the Medicaid programs of all 50 states and establishes a framework for resolving all potential state Medicaid rebate liability claims within 60 days. In connection with the settlement, Mylan also has entered into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. The settlement does not contain an admission or finding of wrongdoing.

Mylan will reclassify the EpiPen Auto-Injector for purposes of the Medicaid Drug Rebate Program and pay the rebate applicable to innovator products effective 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. Over the course of the last year, we have taken significant steps to enhance access to epinephrine auto-injectors, including bringing a solution to the fast-changing healthcare landscape in the U.S. by launching an authorized generic version at less than half the wholesale acquisition cost of the brand and meaningfully expanding our patient access programs," Mylan CEO Heather Bresch said. "Mylan has always been committed to providing patients in the U.S. and around the world with access to medicine, and we look forward to continuing to deliver on this mission."

"Mylan misclassified its brand name drug, EpiPen, to profit at the expense of the Medicaid program," said Acting United States Attorney William D. Weinreb. "Taxpayers rightly expect companies like Mylan that receive payments from taxpayer-funded programs to scrupulously follow the rules. We will continue to protect the integrity of Medicaid and ensure a level playing field for pharmaceutical companies."

"Our five-year corporate integrity agreement requires intensive outside scrutiny to assess whether Mylan is complying with the rules of the Medicaid drug rebate program," added Gregory E. Demske, chief counsel to the Inspector General for the U.S. Department of Health and Human Services. "In addition, the [agreement] requires individual accountability by Mylan board members and executives."

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