U.S. Senator Richard Blumenthal wants the Department of Justice to reject a $465 million settlement it recently reached with Mylan Pharmaceuticals, saying the EpiPen maker should take more accountability for shortchanging the Medicaid program.
In a deal announced Oct. 7, Mylan and the Department of Justice settled claims the company misclassified its EpiPen auto-injector when it came to a Medicaid rebate program, but Blumenthal sent a letter this week to Attorney General Loretta Lynch calling the settlement inadequate.
The government claimed Mylan classified the EpiPen as a “non-innovator multiple source drug,” or generic medication, for the Medicaid Drug Rebate Program. There is no generic form of EpiPen – which delivers epinephrine, commonly known as adrenaline, to people in the midst of life-threatening anaphylaxis from an allergic reaction – though one now is being developed.
Classifying it as a generic, according to Blumenthal, let Mylan pay lower rebates “and reap huge profits at the expense of taxpayers.”
The settlement does not force Mylan to admit any wrongdoing and “pales in comparison” to the more than $700 million the misclassification is estimated to have cost the Medicaid program, Blumenthal said.
“This proposed agreement is a shadow of what it should be, lacking real accountability for Mylan’s apparent lawbreaking,” Blumenthal wrote to Lynch. “It short-circuits an investigation and fact finding necessary to determine the scope of illegality, culpability of individuals and proof of criminal wrongdoing.”
He continued, “This agreement is blatantly inadequate, not only in dollar amount, but also (in) Mylan’s avoiding admission of moral and legal responsibility.”
He previously sent another letter with Senators Chuck Grassley (R-Iowa) and Amy Klobuchar (D-Minn.), urging the Department of Justice to investigate whether Mylan broke the law when misclassifying EpiPen.
In this week’s letter to Lynch, Blumenthal wrote: “A settlement that lacks any acknowledgment of responsibility and requires payment smaller than profits made illegally at taxpayer expense is simply unacceptable.”
When the settlement was announced Oct. 7, Mylan CEO Heather Bresch said in a statement it is “the right course of action at this time for the company, its stakeholders and the Medicaid program.”
She said, “This agreement is another important step in Mylan’s efforts to move forward and bring resolution to all EpiPen auto-injector related matters.”
The company has taken “significant steps,” she said, related to EpiPen, including the pending launch of a first-ever generic form and expansion of programs that help patients afford the medication.
Bresch and Mylan have come under intense criticism and political scrutiny in recent months, mainly over the skyrocketing cost of EpiPens, of which Mylan is the only manufacturer. Blumenthal and others have slammed the company for raising prices more than 400 percent in the last seven years.
Amid the intense backlash, Mylan announced in August it will launch the first generic form of EpiPen. Once it hits the market, it will cost $300 for a two-pack, about half of the $600 a two-pack of name-brand EpiPens costs.
