Mylan Laboratories, the manufacturer of the EpiPen , which spiked the cost of the product from $100 for a two-pack in 2009 to $608, has turned down a request to appear before the Senate Judiciary Committee next week. Sen. Chuck Grassley(R-Iowa) announced that executives at Mylan turned down his request to appear at a Nov. 30 hearing set to focused on the company’s potential settlement with the Obama administration over a Medicaid pricing dispute.The company said reached a $465 million settlement with the Department of Justice over the issue, but the DOJ later denied that it had struck a deal.
A lawyer representing Mylan apparently told Grassley in a letter dated Friday that the company would not take part in the hearing as its focus was on a “pending matter.”
After the controversy over the company raising the price of the Epi Pen, government watchdog reported that the company was overpaid by hundreds of millions of dollars for EpiPens because it was incorrectly paying a lower rebate to the federal government. Mylan had allegedly improperly classified the EpiPen, and ignored federal regulators when they informed the company that it was the wrong rebate, according to the Center for Medicare and Medicaid Services (CMS).
Under the Medicaid Drug Rebate Program, drug manufacturers, such as Mylan, got their products covered by Medicaid if they agree to offer rebates to the government to offset costs. With a brand-name drug such as the EpiPen, which currently has no generic versions and has patent protection, Mylan was supposed to classify the drug as a “single source,” or brand name drug. That meant Mylan was supposed to offer Medicaid a rebate of 23.1 percent of the costs, plus an “inflation rebate” any time Mylan raises the price of the brand-name drug at a rate higher than inflation.
Mylan has opted for such price increases—a lot. Since Mylan bought the rights to EpiPen in 2007, it has raised the price on 15 separate occasions, bringing the current list price to $608 for a two-pack up from about $50 a pen in 2007. That’s an increase of more than 500 percent, which easily beats inflation. Instead of classifying EpiPen as a “single source” drug, Mylan told regulators that it’s a “non-innovator multiple source,” or generic drug. Under that classification, Mylan is only required to offer a rebate of 13 percent and no inflation rebates.
Jeffrey Newman represents whistleblowers.