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Lawmakers Expand EpiPen Inquiry To Determine Medicaid Fraud

Heather Bresch, CEO of Mylan - Photo from Flickr

Mylan is still on the hot heat. Senators leading the inquiries into the skyrocketing prices of the company’s EpiPen have expanded their investigation to health regulators in order to look into whether or not Mylan incorrectly paid Medicaid programs less.

Senator Chuck Grassley, chairman of the Senate Judiciary Committee currently probing into the drug company’s EpiPen price increases, is planning to request documents from both Mylan and the Center for Medicare & Medicaid Services.

These allegedly point to warnings the Medicaid offices gave Mylan about falsely classifying the life-saving EpiPens as a generic instead of a brand-name medicine, a spokesperson from Grassley’s office stated.

The classification let the company pay less than they should have in rebates to state Medicaid programs, though the amounts are unclear, the Washington Post reports. Mylan is currently paying 13% on rebates, the set amount for generic drugs, when it should be paying 23% according to its brand-name status, CMS said.

Putting EpiPen as a generic drug also allowed Mylan to avoid paying inflation rebates required by law when drug companies increase the prices of brand-name medicines above inflation rates.

Mylan caught public attention when consumers and lawmakers noticed that its EpiPen – an auto-injector used to give immediate treatment for severe allergic reactions – went from less than $100 for a two-pack in 2007 to over $600 this year.

Grassley, along with Senators Amy Klobuchar of Minnesota and Richard Blumenthal of Connecticut, asked the Department of Justice in a letter to scrutinize Mylan’s fraudulent activities in its misclassifying EpiPen.

CMS confirmed the accusation, adding that they had repeatedly warned Mylan that their product is a brand-name drug, not a generic one. A spokesperson for the agency said, “This incorrect classification has financial consequences for the amount that federal and state governments spend by reducing the amount of quarterly rebates Mylan owes for EpiPen.”

Blumenthal said Mylan’s actions show “criminal intent,” and that “Mylan falsely called its drug a generic to reap huge profits at taxpayer expense.” He called for swift action and appropriate consequences on the part of the Department of Justice.

A spokesperson for Mylan claimed that EpiPen has been classified as a generic drug since before the drug company acquired it, and that the classification complies with government regulations.

The Attorney General’s Office of West Virginia, where Mylan is based, announced that it has opened an investigation on whether the company defrauded its state Medicaid program.

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