Sen. Chuck Grassley of Iowa has been investigating the cost increases for EpiPen to consumers and whether the taxpayers have been shortchanged under EpiPen’s misclassification under the Medicaid Drug Rebate Program.  He made the following comment today on a settlement announced between the Justice Department and EpiPen maker Mylan over the misclassification.  The case is a False Claims Act qui tam, or whistleblower, case.  Grassley authored the qui tam amendments to the False Claims Act that the Justice Department credits with helping to recover more than $53 billion to the U.S. Treasury.

“There are serious problems here.  It looks like the settlement amount shortchanges the taxpayers.  The government’s own watchdog said the taxpayers may have overpaid for EpiPen by as much as $1.27 billion over 10 years.  The Justice Department doesn’t say how it arrived at $465 million for a similar time period.  Did the Justice Department consider the inspector general estimate?  If not, why not?    

“Another problem is why CMS and Mylan did nothing about the misclassification until a lawsuit forced them to act.   CMS provided records to the Judiciary Committee that show CMS had concerns about how EpiPen was misclassified years ago, yet Mylan failed to correct the classification, and CMS failed to require the company to fix the problem.  The agency failed the taxpayers, and the Obama Administration allowed the problem to go on for years.  

“The settlement is a disappointment.  The agencies that are supposed to look out for taxpayers should not be pulling their punches.  A company got away with overcharging the taxpayers for a long time.  If there’s any good news, it’s that EpiPen will be classified the right way going forward.  That should have been done years ago.  It’s too bad it took a lawsuit to force the right decision.  Thank goodness for the False Claims Act that made this possible.”