Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and House Energy and Commerce Committee Ranking Member Frank Pallone, Jr., D-N.J., today sent a letter to Health and Human Services (HHS) Secretary Sylvia Mathews Burwell requesting additional information regarding EpiPen’s classification and rebate obligations under the Medicaid Drug Rebate Program, following revelations that Medicaid may have been grossly overpaying for the EpiPen for nearly two decades due to a misclassification by Mylan.
“These revelations are yet another example of drug makers abusing the dysfunctional, opaque drug pricing system Americans are forced to live with today," Wyden and Pallone said. “The Medicaid drug rebate program is key to ensuring the most vulnerable have access to affordable medicine. Today we are asking if Mylan has been unfairly underpaying Medicaid for years. If this proves true, not only has Mylan been gouging family budgets through steep price hikes, but it appears they may have also been taking advantage of taxpayers through Medicaid for decades."
As a part of the Medicaid Drug Rebate Program, pharmaceutical companies wishing to sell their products in the program are required to pay a rebate to help make their drugs more affordable. For brand-name drugs, pharmaceutical companies are required to pay to the federal government a discount that is the greater of either 23.1 percent of the Average Manufacture Price (AMP) or AMP minus the “best price" for the drug, plus an additional discount if a drug’s price increases faster than the rate of inflation. The discount for generic drugs is lower, at 13 percent of the AMP.
Recent evidence indicates that, since at least 1997, EpiPen may have been incorrectly designated by relevant pharmaceutical companies as a generic in the Medicaid program, despite being considered a brand-name drug by the Food and Drug Administration (FDA) and Medicare. This would mean Mylan has been vastly underpaying rebates owed to Medicaid for the EpiPen for years.
The letter may be found here,
