Chuck Grassley

United States Senator from Iowa

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Grassley, Colleagues Call on Mylan to Reimburse Defense Department for Excessive EpiPen Costs

Nov 07, 2016

WASHINGTON – Today, following reports that the Department of Defense has overpaid millions in taxpayer funds for EpiPen purchases, U.S. Senators Richard Blumenthal (D-CT), Chuck Grassley (R-IA), and Amy Klobuchar (D-MN) called on Mylan to reimburse the Department of Defense (DoD) for past overpayments for the EpiPen Auto-Injector. Mylan’s misclassification of the EpiPen as a “non-innovator multiple source drug” led the DoD to pay exorbitant rates for the drug at retail pharmacies. Blumenthal, Grassley, and Klobuchar were the first Senators to respond to Mylan’s excessive price increases for a drug to treat extreme, life-threatening allergic reactions.

“The American people have been rightly outraged by Mylan’s excessive pricing and misclassification of its product,” the Senators wrote. “Now, it appears that Mylan’s decisions have impacted our Armed Forces, those who have risked their lives to protect our great nation. We urge you to right this wrong quickly and completely.”

Federal law requires the Department of Veterans Affairs (VA) to determine which drugs require manufacturers to provide a refund for purchases made by certain federal agencies including purchases made through the DoD’s retail pharmacy network. In light of Mylan’s misclassification of the EpiPen as a “non-innovator multiple source drug,” the VA previously determined EpiPens to not be eligible for the DoD retail refund program. As a result, DoD appears to have paid in excess of $50 million for the product over nearly a decade. 

Blumenthal, Grassley, and Klobuchar were the first Senators to respond to Mylan’s excessive price increases for a drug to treat extreme, life-threatening allergic reactions. They have called on the Department of Justice to consider investigating whether Mylan Pharmaceuticals violated the law when it apparently misclassified its EpiPen product in order to pay a lower rebate to states and reap huge profits at the expense of taxpayers. They also called on the Food and Drug Administration (FDA) to answer questions about its approval process and other steps for alternatives to the EpiPen.

In August, Blumenthal, Klobuchar, and Grassley wrote to CMS to call on the agency to provide information on the effect of Mylan’s price increases on government prescription drug costs, asking specifically why EpiPen was classified as a generic drug under the Medicaid Drug Rebate Program. Following these efforts, CMS found that Mylan had misclassified the EpiPen as a “Non-Innovator Multiple Source Drug,” or generic drug, resulting in overpayment for the drug by states and the federal government through the Medicaid Drug Rebate Program. Klobuchar, Blumenthal, and Senator Kirsten Gillibrand (D-NY) have also urged the Department of Health and Human Services to clarify the circumstances of the EpiPen misclassification.

The full text of the today’s letter is below.

Dear Ms. Bresch, 

We write to express concern regarding recent reports that the Department of Defense (DoD) was charged exorbitant rates for EpiPen purchases at retail pharmacies – up to three times the discounted price that DoD receives for drugs administered at Military Treatment Facilities. We are alarmed that Mylan may have overcharged our military for this life-saving drug.  Such reports heighten concerns that Mylan may have knowingly misclassified the EpiPen as a “non-innovator multiple source drug,” avoiding larger rebate payments under the Medicaid Drug Rebate program at the expense of states and taxpayers.

Federal law requires that the Department of Veterans Affairs (VA) determine which drugs require manufacturers to provide a refund for purchases made by certain federal agencies including purchases made through the DoD’s retail pharmacy network.  In light of Mylan’s misclassification, the VA previously determined the EpiPen to not be eligible for the DoD retail refund program under 10 U.S.C. § 1074g(f).  As a result, DoD appears to have paid in excess of $50 million for the product over nearly a decade.

Given Mylan’s stated intent to properly reclassify the EpiPen, Mylan should take immediate action to ensure that service members, their families, and the federal government do not pay excessively for EpiPen.  Since it appears that due to Mylan’s misclassification the DoD was overcharged through its retail pharmacy network, what are Mylan’s plans to reimburse the DoD?  If Mylan’s intention is to “move forward and bring resolution to all EpiPen Auto-Injector related matters,” it is imperative that you quickly resolve this additional discrepancy and take steps to refund our military for past overpayments.

The American people have been rightly outraged by Mylan’s excessive pricing and misclassification of its product.  Now, it appears that Mylan’s decisions have impacted our Armed Forces, those who have risked their lives to protect our great nation. We urge you to right this wrong quickly and completely.  Please respond no later than November 18, 2016.        
 
 

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