The analysis by the inspector general’s office at the Department of Health and Human Services “should worry every taxpayer,” the Iowa senator said.

Mylan May Have Overcharged U.S. For EpiPen By $1.27 Billion: HHS

The U.S. government may have overpaid drugmaker Mylan N.V. by as much as $1.27 billion between 2006 and 2016 for its EpiPen emergency allergy treatment, the Department of Health and Human Services said on Wednesday. The amount is nearly three times a proposed settlement that the company announced in October. (Erman, 5/31)

The Wall Street Journal:
Medicaid Was Overcharged $1.3 Billion For Mylan’s EpiPen, Watchdog Says

Mylan said in October it had agreed to pay $465 million to resolve the allegations by the Justice Department that the company wrongly classified the EpiPen as a generic product and thereby didn’t have to provide as much of a rebate to Medicaid as it would have for a branded drug. The Department of Health and Human Services, however, said in January that it “has not agreed to any settlement.” HHS’s watchdog, the Office of Inspector General, said in a letter to the Senate Judiciary Committee on Wednesday that it estimated Mylan owes the much larger sum. (Rockoff, 5/31)

Mylan May Have Overcharged Taxpayers By $1.27 Billion For EpiPen

Senator Charles Grassley, an Iowa Republican, on Wednesday posted a copy of a report by the Department of Health and Human Services’ Office of the Inspector General. The report says that Mylan, by classifying EpiPen as a generic drug rather than a brand-name product, shortchanged the Medicaid program for the poor. (Koons, 5/31)

Roll Call:
Taxpayers May Have Overpaid For EpiPens By A Billion Dollars

Grassley said that records provided to his committee by the Centers for Medicare and Medicaid Services “showed Mylan was made aware of the misclassification years ago but did nothing.” Wednesday’s letter, signed by Christopher Seagle, the director of external affairs at the inspector general’s office, indicated that its analysis has significant limitations. “OIG did not determine whether Mylan’s classification of EpiPen under the Medicaid Drug Rebate Program was actually correct nor did we determine the amount of rebates, if any, the Federal Government should seek to recover from Mylan now,” Seagle said in the letter.
(Lesniewski, 5/31)

HHS: Mylan May Have Overcharged Taxpayers By $1.27 Billion For EpiPens

The pharmaceutical company has been in hot water for potentially misclassifying its signature epinephrine auto-injector in a way that enabled it to charge a higher price to Medicaid. Because the pens were classified as generic, rather than brand-name products, Mylan paid Medicaid a 13 percent instead of a 23 percent rebate — despite the company being told its classification was incorrect. That allegation came to light in the fall. (Swetlitz, 5/31)

The Fiscal Times:
Ouch! Mylan May Have Overcharged the US More Than $1 Billion for EpiPens

Because Mylan classified EpiPens as generic, the company did not issue rebates to the government that are meant to kick in when the price of a brand-name drug increases at a rate faster than inflation. It would also have owed the government rebates based on the difference between its cost of manufacturing the device and the “best price” it offered on the market. (Garver, 5/31)

And in other news on Mylan —

Pension Funds Seek To Unseat Mylan Directors Over Executive Pay

In a harshly worded letter, several large institutional investors are urging shareholders to oppose the re-election of six Mylan directors — including non-executive chairman Robert Coury — over its “costly record of compensation, [and] risk and compliance failures.” The move comes shortly after Mylan disclosed that Coury was given a $97 million pay package last year.  At the time, corporate governance experts suggested shareholders may revolt over his compensation, which included a $22.3 million termination benefit for his recent change in status to non-executive chair and came in the wake of a wave of pricing controversy and government probes. (Silverman, 5/31)

Pittsburgh Post-Gazette:
Pension Funds Push For Shareholders To Shake Up Mylan Board

A group of high-profile pension funds — concerned about the “extraordinary and egregious” pay package awarded to Mylan Chairman Robert Coury last year — is appealing to shareholders of the generic drug company to shake up the board. In a letter filed this week with the U.S. Securities and Exchange Commission, the funds urged shareholders to vote against the reelection of Mr. Coury and five other longstanding directors at the drugmaker’s June 22 annual meeting. (Sabatini, 5/31)

This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.