Recently, GOOD reported on the huge backlash against Mylan Pharmaceuticals for jacking up the price of its life-saving EpiPen two packs from $100 to $600. Millions of Americans rely on EpiPens to administer a quick life-saving dose of epinephrine in the case of severe allergic reactions. Without fast access to the drug, severe allergy sufferers can die within minutes. But today it looks like Mylan will have to answer to the lords of karma after reports show the pharmaceutical company has been overcharging the government for years.
According to a report by CNBC, Mylan was paying the 13-percent generic-device Medicaid rebate to the government when it should have been paying the brand-name rate of 23.1 percent. This incorrect classification has cost taxpayers untold millions because the product has been labeled as generic since 1997. “This incorrect classification has financial consequences for the amount that federal and state governments spend because it reduces the amount of quarterly rebates Mylan owes for EpiPen,” acting Centers for Medicare and Medicaid Services Administrator Andy Slavitt wrote to the Senate Finance Committee ranking member Senator Ron Wyden.
Drug rebates are paid by pharma companies to offset the federal and state costs of outpatient prescription drugs. Companies such as Mylan pay these rebates in order to have their drugs covered Medicaid and Medicare. The Centers for Medicaid and Medicare Services have yet to announce the amount Mylan has underpaid, but Senator Amy Klobuchar of Minnesota says the company costs her state at least $4 million a year. “In Minnesota, the Department of Human Services has estimated that this misclassification will cost our state more than $4 million in overpayment in just one year,” Klobuchar said. “But that’s just one state in one year for one drug.”
Mylan’s latest controversy comes on the heels of last week’s revelation that its CEO, Heather Bresch, daughter of daughter of US Senator Joe Manchin, allegedly lied to Congress. Two weeks ago, Bresch told a Congressional committee that Mylan makes $100 in profit for every EpiPen pack, but after being badgered by The Wall Street Journal, the pharmaceutical company revised its figure to $160.
