The EpiPen was misclassified through the Medicaid Drug Rebate Program at the expense of states and taxpayers; The Minnesota Department of Human Services has estimated that this misclassification will cost Minnesota more than $4 million dollars in overpayment this year alone

In a letter to Klobuchar today, CMS disclosed that total Medicare and Medicaid Spending on EpiPen totaled nearly $1.3 billion from 2011 to 2015; However, CMS did not disclose how much the misclassification has cost taxpayers or if states and the federal government will be repaid for the misclassification

 
WASHINGTON, DC – Following efforts from U.S. Senator Amy Klobuchar, the Centers for Medicare and Medicaid Services (CMS) today disclosed how much Medicare and Medicaid spent on the EpiPen but questions still remain on how much the misclassification of the EpiPen through the Medicaid Drug Rebate Program has cost taxpayers. The EpiPen was misclassified at the expense of states and taxpayers. The Minnesota Department of Human Services has estimated that Mylan’s misclassification will cost Minnesota more than $4 million dollars in overpayment this year alone. In a letter to Klobuchar today, CMS disclosed that total Medicare and Medicaid Spending on EpiPen totaled nearly $1.3 billion from 2011 to 2015. However, CMS did not disclose how much the misclassification has cost taxpayers or if states and the federal government will be repaid for the misclassification. 

“I sent CMS a letter in August asking for information on the impact of Mylan’s price increase on government prescription drug costs and HHS another letter in September with additional questions. While we found out today that Medicare and Medicaid spent nearly $1.3 billion on the EpiPen in one five-year span, we have yet to get information on how much money the misclassification of Mylan has cost taxpayers,” said Klobuchar. “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. 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.”

Since the end of 1997, EpiPen has been misclassified as a “Non-Innovator Multiple Source Drug,” or generic drug, for purposes of the Medicaid Drug Rebate Program. In order to protect states from high pharmaceutical prices, the Medicaid Drug Rebate Program requires drug companies to pay a percentage of their revenues to states in the form of rebates. Under this program, companies like Mylan are required to pay a higher rebate for brand-name drugs than for generic drugs. In August, Klobuchar wrote to CMS and called on the agency to provide information on the effect of Mylan’s price increases on government prescription drug costs, asking specifically why EpiPen was classified as a generic drug under the Medicaid Drug Rebate Program.

In a letter to the DOJ last week, Klobuchar and Senators Richard Blumenthal (D-CT) and Chuck Grassley (R-IA) called for the Department of Justice (DOJ) to consider investigating whether Mylan Pharmaceuticals violated the law when it misclassified its EpiPen product in order to pay a lower rebate to states and reap huge profits at the expense of taxpayers.

Last month, Klobuchar called for the Federal Trade Commission (FTC) to investigate Mylan Pharmaceuticals for possible antitrust violation. Klobuchar has also called for the Senate Judiciary Committee to hold a hearing to investigate the enormous increase in the price of EpiPens.

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