WASHINGTON – Sen. Chuck Grassley, Chairman of the Judiciary Committee, has asked the Securities and Exchange Commission to inform the Judiciary Committee on whether the commission is looking into whether Mylan misled investors in announcing a settlement on overcharging the taxpayers for EpiPens under Medicaid.
“If Mylan’s purpose of the press release was to increase stock prices at the risk of misleading investors, it is exactly this set of facts and circumstances that the SEC should monitor,” Grassley wrote to SEC Chair Mary Jo White. “Companies cannot be allowed to manipulate the markets and investors via press releases. Accordingly, since the SEC is already investigating Mylan, I request that you inform the Committee as to whether the SEC is looking into Mylan’s press release to determine if it was materially misleading.”
Grassley wrote that Mylan issued a press release Oct. 7 announcing the settlement with specific references to some of its alleged terms, but the Justice Department has maintained that there is no executed settlement and has been unwilling to confirm the alleged terms. The company also filed a document called an 8-K report describing the settlement and mentioning an SEC investigation over the Medicaid overcharges.
“This seems to contradict Mylan’s claim that all potential liability claims have been resolved. Mylan made no mention of the fact that they are under an SEC investigation in their press release,” Grassley wrote. “Given the dissonance between the press release, the 8-K filing, and the fact that no settlement agreement has been executed, Mylan should explain why it released such a strongly worded press release knowing that a finalized settlement did not yet exist and given the apparent SEC investigation. Further, it has now been over five weeks since Mylan’s press release and apparently a settlement has still not been executed.”
Grassley asked for a response by Nov. 29. Grassley is looking into the potential settlement between the Justice Department and Mylan over hundreds of millions of dollars of overcharges to the taxpayers under the Medicaid Drug Rebate Program and the role government agencies had in regard to holding Mylan accountable for the misclassification. Centers for Medicare and Medicaid Services officials were told in March 2009 that Mylan misclassified the EpiPen and was overcharging the taxpayers, yet the problem apparently persisted nonetheless. Grassley is seeking accountability for the problem to help make sure it does not recur.
Grassley’s letter to the SEC is available here.