Chuck Grassley

United States Senator from Iowa

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Grassley: Latest Estimate is Taxpayers Overpaid $1.27 Billion for EpiPen

May 31, 2017

Today, Sen. Chuck Grassley, chairman of the Judiciary Committee, received an estimate from the Department of Health and Human Services Office of Inspector General that the taxpayers may have overpaid for EpiPen by as much as $1.27 billion from 2006 through 2016, far more than the $465 million that the company reported it had agreed to in settlement negotiations with the Justice Department.  The HHS OIG letter is available here. Grassley has pressed EpiPen maker Mylan and the Centers for Medicare and Medicaid Services (CMS) for documentation and answers on why EpiPen was misclassified under the Medicaid Drug Rebate Program, resulting in overcharges to the states and taxpayers.  Grassley has pressed for months for a complete accounting of the overcharges and sought records of communications between CMS and Mylan about the misclassification.  Recently, CMS provided records to the Committee that show CMS told Mylan on several occasions that the EpiPen was misclassified, yet Mylan failed to correct the classification. Mylan has repeatedly refused to provide its records of those communications with CMS to the Committee.  Grassley made the following comment.
 
“High prescription drug prices are a major concern across the country.  I’m working to advance legislation that would help, including bills to bring more lower cost generic drugs to the market.  As part of bringing down drug costs, we have to make sure companies that take part in federal health care programs aren’t gaming the system.  Congress has a constitutional responsibility to conduct oversight of the executive branch, and making sure taxpayers don’t overpay for EpiPens or any other drugs in public health care programs is our job.  The taxpayers spend billions of dollars on prescription drugs through Medicaid, Medicare and other programs.
 
“The fact that the EpiPen overpayment is so much more than anyone discussed publicly should worry every taxpayer.  Mylan and the Obama Administration reportedly were close to settling the overpayment for much less than $1.27 billion.  CMS recently provided records to the Committee that show Mylan was made aware of the misclassification years ago but did nothing.  It looks like Mylan overcharged the taxpayers for years with the knowledge EpiPen was misclassified, and the previous administration was willing to let the company off the hook.  The fact that Mylan is unwilling to cooperate and provide documents voluntarily makes me wonder what there is to hide and whether a subpoena is the only way to get to the bottom of this. 
 
“The government needs to do a much a better job of holding companies to their commitments in federal health care programs.  It appears the Obama Administration failed to use all available tools to hold Mylan accountable.  The taxpayers deserve more from their government and don’t need to give anyone a blank check.  I’ll continue to push for accuracy under the Medicaid Drug Rebate Program and for Mylan to produce the requested records to the Committee.  Taxpayers have a right to know what happened here and to be repaid whatever they are owed.”

 

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