Mylan’s Payments to Medicaid for EpiPen Queried by Lawmakers

  • Medicaid may have been grossly underpaid, the lawmakers say
  • Mylan shares fall after letter to drugmaker made public

Two top Democratic lawmakers asked for information about how Mylan NV may have grossly underpaid rebates to a government health program for its EpiPen allergy shot for almost two decades, adding to the growing number of inquiries about the drugmaker’s pricing practices.

Senator Ron Wyden of Oregon and House Representative Frank Pallone from New Jersey sent a letter to Health and Human Services Secretary Sylvia Mathews Burwell Friday, asking for more details about the drug’s classification and rebate obligations under the Medicaid health program for the poor.

“Mylan has complied with all laws and regulations regarding the Medicaid rebate classification of EpiPen,” Nina Devlin, a company spokeswoman, said in an e-mail.

The EpiPen was classified as a “non-innovator” drug, which allows for a lower rebate paid to government programs, before Mylan acquired the product in 2007, Devlin said. Under a new federal rule, Mylan will have to apply to maintain its non-innovator status by April 1, which the company intends to do, she said.

Mylan dropped 5 percent to $39.83 at 2:38 p.m. in New York. The shares had begun falling earlier after Democratic presidential candidate Hillary Clinton released a set of proposals for curbing price increases on older drugs.

After Mylan raised the price of the EpiPen more than 400 percent since 2007 to $600 for a two-pack of the shots, the House Oversight and Government Reform Committee and the Senate Special Committee on Aging requested briefings and information from the company. The drugmaker agreed to brief the oversight committee next week, MJ Henshaw, a committee spokeswoman, said in an e-mail. An aging committee aide said Mylan has also agreed to brief panel staff next week.

Committees often seek briefings with key players to allow congressional staff to prepare for hearings. Mylan Chief Executive Officer Heather Bresch is the daughter of Democratic Senator Joe Manchin of West Virginia. Manchin is not on the aging or oversight committee.

Schools Program

Representative Tammy Duckworth, a Democrat from Illinois, wrote the U.S. Department of Justice on Thursday asking it to investigate whether Mylan violated antitrust laws.

Mylan successfully pushed legislation known as the 2013 School Access to Emergency Epinephrine Act to encourage use of the EpiPen in schools nationwide. Mylan also has instituted the EpiPen4Schools Program that allows schools to receive four free auto-injectors.

That program may “suppress competition using aggressive, anticompetitive contractual stipulations that prohibit local educational agencies from purchasing a competitor’s product for a specified duration of time as a condition for participating in Mylan’s program,” Duckworth wrote.

‘Shell Game’

Senator Charles Grassley, the Iowa Republican who chairs the Senate Judiciary Committee, asked Mylan to answer questions on its pricing practices by Sept. 6. Mylan has asked for extra time to respond and said they’ll do so by Sept. 8, Jill Gerber, a spokeswoman for Grassley, said in an e-mail.

House Energy and Commerce Committee leaders have also requested information from Mylan on EpiPen prices. In addition, Senator Amy Klobuchar, a Democrat from Minnesota, has asked the Federal Trade Commission to investigate whether Mylan used “incentives or exclusionary contracts with insurers, distributors, or pharmacies to deny an alternative product access to the market.”

Mylan has responded to the congressional backlash by offering coupons to reduce patients’ out-of-pocket costs and saying it will introduce a generic EpiPen for $300. The coupons have raised further questions for lawmakers. Twenty Democratic senators sent a letter to Bresch on Tuesday expressing their “serious concerns.”

“These changes will help some customers who are struggling to afford EpiPens,” wrote the senators, including Elizabeth Warren from Massachusetts and Richard Blumenthal from Connecticut. “Your discount programs, however, represent a well-defined industry tactic to keep costs high through a complex shell game.”

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