Mylan Will Pay Over $465 Million For Medicaid Claims Settlement

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Mylan Mylan NV has agreed to a $465 million payment to settle the allegations it overcharged the U.S. government for the company’s EpiPen products, just the latest move by the pharmaceuticals firm in its attempt to quell the furor its prices have caused.

The settlement is with the Department of Justice and comes after health officials and senators recently made allegations that Mylan had classified its EpiPen incorrectly as a generic product. Officials said the EpiPen should have been a brand product.

The injector that resembles a pen delivers emergency shots of epinephrine to counter severe reactions that are allergic.

This generic classification gave Mylan the ability to pay less of a rebate on the sales of EpiPen to programs under Medicaid, underpaying for five years of millions of dollars what was owed to the program for the poor.

Andy Slavitt the acting administrator of the Center for Medicare and Medicaid Services wrote about this in a letter he sent this week to lawmakers.

Drug makers by law are required to pay sales rebates for the sales to patients that have Medicaid insurance. Medicaid is funded by states as well as the federal government.

Through classifying the EpiPen as generic, Mylan was able to pay out smaller rebates of 13% equal to approximately $163 million, when officials said the company should have paid 23% or even a higher rebate for drugs that are brand name.

A spokesperson from the Justice Department said on Friday she could not confirm or deny that an investigation existed and would not comment any further.

Mylan, which last year moved its headquarters to the Netherlands in a tax conversion, is managed in Pennsylvania. The company has been hit with criticism for its repeated increases in prices on the EpiPen.

In 2007, Mylan acquired the product’s rights and has increased the prices by 550% since 2007.

Previously Mylan did not disclose any investigation. Settlements between the government and pharmaceutical companies are not that unusual, but usually occur after years of back and forth negotiations.

The speed in which Mylan and the government reached a rebate settlement signaled that the business was eager to move beyond the most recent controversy that has engulfed it.

Mylan said the agreement does not involve admission of any wrongdoing, but that it is expected to enter into one with the federal agency overseeing both Medicaid and Medicare.

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