For people with severe allergies, having an EpiPen can mean the difference between life and death. Because there's no generic alternative, EpiPen manufacturer Mylan just keeps jacking up the price and ripping off patients. They also seem to have ripped off the US government. Today, a probe by the US Department of Health and Human Services concluded that the company actually stiffed American taxpayers for three times more than was previously believed.
Mylan Agrees To Pay $US612 ($824) Million For Ripping Off US Government On EpiPens, Stock Price Soars
Mylan, the drug company that makes EpiPens, has been overcharging Medicare and Medicaid in the US for years. But today the pharmaceutical company had to finally pay the piper. In a deal announced by the notorious price-gougers, Mylan will hand over $US465 ($626) million ($US611.8 ($823) million) to the US government, but it won't have to admit any wrongdoing.
Back in October, Mylan agreed to pay the US government $US465 million ($628.7 million) without admitting any wrongdoing. It was the end of a long saga that showed what a vile company Mylan is, and it was quickly rewarded with a bounce in its stock price. Senator Chuck Grassly released the findings of the HHS report today, and he's indicating that the final price that Mylan will need to pay may not be settled yet. "Mylan and the Obama Administration reportedly were close to settling the overpayment for much less than $1.27 billion [$AU1.72 billion]," Grassley writes in the statement. "Taxpayers have a right to know what happened here and to be repaid whatever they are owed."
Mylan had a pretty great scheme going. EpiPens in the US went from costing $US57 ($77) in 2007 to costing around $US600 ($807) in 2016. Without a generic version on the market, the company could name their price. But they also appear to have taken advantage of reimbursement rates with Medicare and Medicaid. By US law, pharmaceutical companies have to reimburse 13 per cent of the total cost of a generic drug that's paid for by one of the programs. Name brand drugs have to reimburse 23.1 per cent. Mylan classified the EpiPen as generic and now Uncle Sam is calling.
The news dropped the stock price of Mylan by one per cent and tomorrow's trading will show just how big a deal for the company this problem will be in the short term. Shareholders are pissed, and a group of four institional investors are calling for six directors of the company to be blocked from reelection. The investors say that the directors have caused Mylan "significant reputational and financial harm". According to the Associated Press, share prices fell 10 per cent over the last 12 months. But Chairman Robert Coury made off with $US160 million ($216.3 million) in compensation in 2016. It seems unlikely that fresh appearances in front of Congress will help the value of the company.