Mylan Ripped Off The US Government, Ironically By Misclassifying EpiPens As A Generic Drug

The US government spent over $US1.3 billion ($1.7 billion) on EpiPens from 2011 to 2015. But Mylan, the makers of EpiPen, has been overcharging the government for the life-saving allergy medication by misclassifying it as a generic, rather than a name brand drug. If you don't know whether to laugh or cry at this point, you're not alone. Mylan CEO Heather Bresch, seen lying to the House Oversight and Government Reform Committee on 21 September 2016 (Photo by Alex Wong/Getty Images)

When the US government pays for drugs under Medicare and Medicaid, drug companies are required to reimburse a certain percentage of that price. In the case of EpiPen, that reimbursement is 13 per cent of the total cost, which is standard for a generic drug. But EpiPen isn't a generic drug. According to the Centres for Medicare and Medicaid Services (CMS), Mylan should be paying 23.1 per cent, which is the reimbursement rate for name brand drugs.

CMS won't say yet how much Mylan owes the US government for misclassifying the EpiPen as a generic. But Senator Amy Klobuchar of Minnesota has been at the forefront of investigating Mylan's price gouging and contends that it has cost her state at least $US4 million ($5.2 million) in just a single year.

"In Minnesota, the Department of Human Services has estimated that this misclassification will cost our state more than $4 million in overpayment in just one year," Klobuchar said in a statement. "But that's just one state in one year for one drug. We need to clear answers on how deep this misclassification goes, how much it has cost taxpayers across the country, how many other drugs may be misclassified, and how we get that money back."

One of the things that has sparked so much outrage over Mylan's price gouging for the EpiPen is the lack of a generic alternative, so these new revelations are particularly appalling to consumers. Mylan announced that it will offer a generic of the drug soon.

The news of Mylan overcharging the government came out Wednesday on the heels of revelations that Mylan CEO Heather Bresch had lied to Congress about how much the company makes per EpiPen. Bresch had told a Congressional committee that they make $US100 ($131) on every two-pack of EpiPens, when in fact the company makes $US160 ($210).

We'll see if Mylan's generic comes out before all the execs wind up in prison.

[CNBC]

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Comments

    So in the end Mylan will get the maximum penalty of, something like, $12,000 and then go laughing all the way to their tax havens.

      I suspect this one will be one of those isolated cases where the book gets thrown HARD sp it looks like there's a crackdown. Lying to Congress and making them look like fools? Bad choice.

    Corruption really is ingrained into the USA society. So much so no-one's really surprised at this sort of thing anymore, simply that they got caught. Tipping to get better tables at restaurants, tickets, or even better service, is really a version of corruption. That mentality helps foster the corruption in every facet of their society,

    Anyone pay attention to how Mylan donated huge sums to the Democrats.. paid the Clinton Foundation huge speaking fees ?

    Amazing to see Hillary all flabbergasted and appalled now, since she the Democrats were behind the legislation that pushed the price of epi-pens through the roof.

    Under the Democrats, the FDA rejected applications from half a dozen competitors to Mylan. They also forced schools to buy up reserves of epipens. Nothing like a customer that spends other people's money to drive up demand and the price of your product.

      Nice try at fabricating truth.

      So far in 2016 Mylan has donated $75000 to political parties: 31% to Democrats and 69% to Republicans. That is, more than twice as much went to the Republicans.

      In a presidential campaign worth 10s of millions $24000 is peanuts.

      Hillary Clinton was Secretary of State, not Health Secretary. The School Access to Emergency Epinephrine Act was passed by Congress (the Republican-controlled Congress) in 2013 when she wasn't even in office anymore.

      No doubt this is a great example of Big Business capturing government. While there was a laudable goal to push in ensuring EpiPens were available in schools for kids with allergies, the way it was done obviously greatly benefited Mylan. Even without Mylan rorting the rebates. But it was Big Business capturing both parties, and it has no particular link to Clinton.

      Nice try there buddy boy, Pity none of your statements have any basis in fact. As proven below.

    http://reason.com/archives/2016/10/04/epipens-and-government-cheese

    Mylan is Enronning so hard right now. It's glorious.

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