MANHATTAN (CN) – New York announced a $465 million, state-federal deal with Dutch pharmaceutical giant Mylan on Thursday to settle charges over EpiPen rebates.
For nearly a decade, Mylan classified EpiPen as a “Non-Innovator Multiple Source Drug,” or generic drug, for purposes of the Medicaid Drug Rebate Program.
Two federal whistleblower actions pending in Massachusetts soon fueled allegations, however, that Mylan knowingly underpaid federal rebates for the drugs EpiPen and EpiPen Jr. that were dispensed to Medicaid beneficiaries.
A May 31 report by the Office of Inspector General at the Department of Health and Human Services calculated the estimated rebate differential to be $1.27 billion for the 10-year period spanning 2006-16.
Mylan’s settlement Thursday does not contain an admission or finding of wrongdoing. New York will receive $38.5 million of the settlement fund.
“Pharmaceutical companies should be warned: efforts to shortchange Medicaid will not be tolerated, and we’ll ensure that these companies are held accountable,” New York Attorney General Eric Schneiderman said in a statement on the deal.
Mylan CEO Heather Bresch meanwhile assured investors that “bringing closure to this matter is the right course of action for Mylan and our stakeholders to allow us to move forward.”
“Over the course of the last year, we have taken significant steps to enhance access to epinephrine auto-injectors, including bringing a solution to the fast-changing healthcare landscape in the U.S. by launching an authorized generic version at less than half the wholesale acquisition cost of the brand and meaningfully expanding our patient access programs,” Bresch added in a statement.
Connecticut Sen. Richard Blumenthal posted a fiery response to what he believes was insufficient settlement, calling the $465 million figure “a feeble fraction of the $1.27 billion Mylan swindled out of Connecticut and American taxpayers.”
“Quite simply, the Department of Justice is letting this deceptive pharmaceutical behemoth off the hook,” Blumenthal said. “Absolving Mylan from a finding of wrongdoing has cleared the way for the company to pocket the money it embezzled from an American public in desperate need of lifesaving and affordable medications.”