Generic drug giant Mylan announced Thursday it has finalized its settlement with the U.S. Department of Justice for overcharging Medicaid for the EpiPen and Maine stands to benefit from the deal.
The settlement amount is $465 million, unchanged from when Mylan announced a preliminary deal in October that was criticized by lawmakers and others as not being harsh enough.
Maine Attorney General Janet Mills said Maine’s share of the deal is nearly $2.5 million, of which more than $1.5 million will flow to the federal government, which funds a significant portion of the state’s Medicaid program. Of the remaining $950,000 balance, about $708,000 will go back into the state’s Medicaid account and $241,000 will support the Medicaid Fraud Control Unit, which is within the office of the attorney general.
“We contend that Mylan’s conduct with respect to the lifesaving EpiPen is unconscionable and a violation of federal law,” said Mills in a written statement. “We will continue to take action to protect consumers and the Maine taxpayers who are footing the bill for these very high-priced drugs.”
The settlement announced Thursday is separate from another lawsuit Maine and 19 other states filed against Mylan in December 2016, which is still pending, for alleged price fixing for diabetes and antibiotic medications.
The EpiPen emergency allergy shot has been classified as a generic instead of a brand name drug for many years, allowing Mylan to pay lower rebates to Medicaid and resulting in states paying more for the product. Drug companies are responsible for ensuring that their products are correctly classified.
Mylan said Thursday it would reclassify the auto-injector as a brand name, or innovator drug, and pay the higher rebates under the Medicaid Drug Rebate Program effective April 1, 2017.
The settlement does not contain an admission or finding of wrongdoing, the company said.
“The settlement provides for resolution of all potential Medicaid rebate liability claims by the federal government, as well as potential claims by certain hospitals and other covered entities that participate in the 340B drug pricing program,” Mylan said in a news release.
The deal also “allocates money to the Medicaid programs of all 50 states and establishes a framework for resolving all potential state Medicaid rebate liability claims within 60 days,” the statement said.
Last fall, the preliminary settlement was blasted by Sen. Elizabeth Warren, D-Mass., as “shockingly soft.”
Besides the Medicaid issue, Mylan faced widespread backlash last year for raising the price of the EpiPen by some 500 percent in recent years. The company, which is incorporated in the Netherlands but is run from executive offices outside Pittsburgh, responded by releasing a generic version that lists for half the price.
BDN staff writer Christopher Cousins contributed to this report.