EpiPen maker overcharged government for $1B, says watchdog

The company was engaged in a price hiking controversy in 2016.

ByABC News
May 31, 2017, 8:30 PM

— -- The company behind the lifesaving EpiPen epinephrine injectors may have overcharged the federal government by more than $1 billion, according to a new estimate from the Department of Health and Human Services.

In a letter to Sen. Chuck Grassley, R-Iowa, the chairman of the Senate Judiciary Committee, the HHS inspector general revealed that Mylan, the pharmaceutical company behind the devices, may have bilked taxpayers out of $1.27 billion over 10 years by incorrectly classifying its signature product under a government rebate program.

Categorizing EpiPens as a generic drug instead of a brand-name product allowed the company to provide Medicaid less in rebates, leaving taxpayers with a bigger bill.

"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," Grassley said in a statement. "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."

Grassley's Judiciary Committee has been investigating Mylan's EpiPen pricing since last year.

In October, after weeks of public criticism and scrutiny from members of Congress, Mylan announced a $465 million settlement with the Department of Justice over concerns that the company misclassified EpiPens. The company admitted no wrongdoing under the terms of the settlement.

The company faced criticism earlier in 2016 over a price hike on the injectors. A two-pack of the product rose to over $600 in 2016 after costing less than $100 in 2007, an increase that left users seeking alternatives and drew the attention of lawmakers.

A spokesperson for Mylan declined to comment on the estimate Wednesday, but said the company is working with the government to finalize the settlement as soon as possible.