WASHINGTON – Sen. Chuck Grassley today pressed the Justice Department for details of a reported $465 million settlement with Mylan over overcharges to the taxpayers for EpiPens. The settlement involves the misclassification of the product under the Medicaid Drug Rebate Program. Grassley has been seeking answers on whether Iowa taxpayers and those in other states, as well as the federal government, overpaid for EpiPens. In light of the reported settlement, Grassley is seeking details on whether the states would receive their fair share of the proceeds and whether the settlement is “reasonable and proportionate” in relation to the amount overcharged.
“Now, more than ever, the Justice Department should be open and transparent with the American people,” Grassley wrote to Attorney General Loretta Lynch. “It is the taxpayers and the states that Mylan’s misclassification victimized. Many Iowans have talked to me or written letters about their struggles to afford the EpiPen. And recent news reports indicate that Mylan may have failed to pay over $700 million to Medicaid over the past five years, much more than the current settlement. The people and the states need to be assured that the $465 million settlement will make them whole.”
Since Mylan announced the settlement late Friday, few details have emerged either from the Justice Department or the Centers for Medicare and Medicaid Services (CMS), which says it warned the company over the misclassification but hasn’t disclosed how or when the warnings took place.
The few details that have come forward about the settlement raise questions about whether the taxpayers are getting adequate compensation for the over-charging. For example, one media report said Mylan would be able to continue misclassifying EpiPens and paying the lower rebate until April 2017. “Given that CMS has said Mylan misclassified its EpiPen, why is Mylan not required to reclassify the EpiPen immediately?” Grassley wrote. “An immediate reclassification would help prevent Mylan from further over-charging the states under the Medicaid Drug Rebate Program.”
It’s not clear whether the reported $465 million settlement amount contains all potential damages to be assessed by the Justice Department, including potential actions under the False Claims Act that could result in treble damages paid to the taxpayers. Grassley is calling on the Justice Department to make the settlement terms public.
“In light of the fact the Justice Department has released settlements to the public before and in light of the fact Mylan has already publicly commented on the terms of the settlement, will the Department publish the settlement in full with Mylan? If so, when? If not, why not?” Grassley wrote.
Grassley’s letter is available here.