Mylan said late Friday that the settlement didn’t include any finding of wrongdoing on the part of the company and was reached through its Canonsburg, Pa.-based subsidiary Mylan Inc.
At issue was whether the EpiPen and EpiPen Jr auto-injectors were properly classified with the Centers for Medicaid & Medicare Services (CMS) as a non-innovator drug — i.e. as a generic drug — under the Medicaid Rebate statute and subject to the formula for calculating rebates to Medicaid for such drugs.
According to Mylan, EpiPen has been classified with CMS as a non-innovator drug since before the company acquired the product in 2007, based on “longstanding written guidance from the federal government.”
The government contended that EpiPen is a branded drug, and federal and state governments should have received larger rebates. In a letter this week to the Senate Finance Committee, CMS argued that Mylan improperly classified EpiPen under Medicaid.
Mylan said that, in connection with the settlement, it expects to enter into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services. The company added that it will continue to work with the government to finalize the settlement.
With the settlement, Mylan will include a pretax charge of about $465 million in the quarter ended Sept. 30.
“This agreement is another important step in Mylan’s efforts to move forward and bring resolution to all EpiPen Auto-Injector-related matters,” Mylan chief executive officer Heather Bresch said in a statement.
“The agreement is in addition to the significant steps Mylan has taken in relation to EpiPen Auto-Injector over the past several weeks, including the unprecedented, pending launch of a generic version of EpiPen Auto-Injector and expansion of our patient access programs for this product,” she noted. “Entering into this settlement is the right course of action at this time for the company, its stakeholders and the Medicaid program.”
Starting in late August, Mylan became embroiled in a public furor over a sharp price rise for EpiPen, an effective emergency treatment for anaphylaxis, a potentially life-threatening allergic reaction.
Members of Congress complained that EpiPen’s price has surged 400% — from about $100 for a two-injector pack to over $500 or $600 — since Mylan acquired the product in 2007. The lawmakers reported that they had fielded numerous complaints from consumers, who noted that the cost burden is exacerbated because the medication expires in about a year. Congressmen also said the price hike stoked costs for government benefit programs.
Mylan said the generic EpiPen will carry a list price of $300 for a two-pack carton, a discount of more than 50% to the Mylan list price, or wholesale acquisition cost, of the branded medicine.
Late last month, Mylan’s Bresch gave testimony on the EpiPen pricing issue at a hearing by the House Committee on Oversight and Government Reform.