The EpiPen was misclassified through the Medicaid Drug Rebate Program at the expense of states and taxpayers; Klobuchar had called on the Justice Department, the Centers for Medicare and Medicaid Services, and the Federal Trade Commission to investigate
MINNEAPOLIS, MN – U.S. Senator Amy Klobuchar today released the following statement on Mylan’s $465 million settlement with the Department of Justice over the misclassification of the EpiPen. The EpiPen was misclassified at the expense of states and taxpayers. Klobuchar had called on the Justice Department, the Centers for Medicare and Medicaid Services, and the Federal Trade Commission to investigate.
“I am glad the Department of Justice pursued this so quickly, since the misclassification was an outrage,” said Klobuchar. “At the same time, this must be the tip of the iceberg. If other drugs are misclassified, and surely EpiPen isn’t the only one, the public deserves to know it, the taxpayers need to get their money back, and the process needs to be changed to stop this from happening again.”
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. Following Klobuchar’s efforts, CMS found that Mylan had misclassified the EpiPen as a “Non-Innovator Multiple Source Drug,” or generic drug, resulting in overpayment for the drug by states and the federal government through the Medicaid Drug Rebate Program. Klobuchar and Senators Richard Blumenthal (D-CT) and Kirsten Gillibrand (D-NY) have also urged the Department of Health and Human Services (HHS) to clarify the circumstances of the EpiPen misclassification.
In a letter to the DOJ last week, Klobuchar, 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.