(Kaylee McGhee, Liberty Headlines) The Department of Justice agreed to a $465 million settlement with Mylan Inc. on August 17th after the pharmaceutical company overcharged the U.S. government and ripped off taxpayers for apparently far more than that.
Mylan is the only pharmaceutical company that manufactures the EpiPen, an epinephrine auto-injector drug used for emergency treatments of severe allergic reactions. The company has robbed taxpayers of nearly $1.27 billion over the years, according to a report released on the 16th.
Sen. Chuck Grassley, R-Iowa, who investigated the case for more than a year, said Mylan violated the False Claims Act by intentionally misclassifying the EpiPen as a generic drug in order to avoid paying rebates to Medicaid. This allowed the company to dramatically increase the price of the life-saving treatment, while avoiding paying into Medicaid and Medicare.
“Mylan misclassified its brand name drug, EpiPen, to profit at the expense of the Medicaid program,” said Acting United States Attorney William D. Weinreb, when the settlement announcement was made. “Taxpayers rightly expect companies like Mylan that receive payments from taxpayer-funded programs to scrupulously follow the rules. We will continue to root out fraud and abuse to protect the integrity of Medicaid and ensure a level playing field for pharmaceutical companies.”
Mylan has produced EpiPens since 2007, but only recently came under scrutiny when its CEO, Heather Bresch, raised the price by 461 percent. The U.S. government took the company to court, and Mylan agreed to settle in October for the $465 million in penalties.
Even after the settlement, however, Mylan continued to overcharge until the Department of Health and Human Services released its investigative report of the case in August.
Grassley said taxpayers, who have overpaid for EpiPen for years, are being shortchanged.
“The settlement is a disappointment. The agencies that are supposed to look out for taxpayers should not be pulling their punches. A company got away with overcharging the taxpayers for a long time,” Grassley said in a statement. “If there’s any good news, it’s that EpiPen will be classified the right way going forward. That should have been done years ago. It’s too bad it took a lawsuit to force the right decision. Thank goodness for the False Claims Act that made this possible.”