West Virginia Attorney General accuses Epi-Pen’s owner of Medicaid fraud

The state of West Virginia is investigating Mylan, the maker of EpiPen, a life-saving autoinjector used to treat severe allergic reactions, for possible anti-trust violations, including skyrocketing price increases.

Attorney General Patrick Morrisey announced the fraud investigation Tuesday against the company that was founded in his state. Mylan’s chief executive, Heather Bresch, is the daughter of West Virginia Sen. Joe Manchin, a Democrat.

The state filed documents in Kanawha Circuit Court to force Mylan to provide documents related to its EpiPen. Morrisey issued Mylan a subpoena on Aug. 26. The company initially agreed to cooperate, but has since failed to respond to the majority of the subpoena…

The drug maker, which has a manufacturing plant near Morgantown, W.Va., acquired the rights to the drug in 2007, when it cost about $57 and it has since that time raised the price to $500 for a two-pack.

The court filing documents the price increases as well as “failed attempts to introduce an EpiPen competitor, litigation over intellectual property and dominance Mylan has over the epinephrine auto injector market,” according to the release.

The subpoena also asks about rebates Mylan paid to participate in the state’s Medicaid program…The petition suggests such conduct, if proven, could subject Mylan to a potential Medicaid fraud action under state law…

Hope the greedy creeps at the top of Mylan get what they deserve.

2 thoughts on “West Virginia Attorney General accuses Epi-Pen’s owner of Medicaid fraud

  1. Geezer says:

    According to the Kaiser Family Foundation total Medicare Part D spending for the EpiPen increased from $7.0 million in 2007 to $87.9 million in 2014, an increase of 1151% http://kff.org/medicare/issue-brief/how-much-has-medicare-spent-on-the-epipen-since-2007/ However: “Because our analysis is based on data available only to 2014, our estimates do not reflect additional EpiPen price increases that have occurred since then. The list price of the EpiPen has increased (in nominal terms) from $349 in May 2014 to $609 in May 2016, a 74% increase. If total Part D spending per EpiPen prescription also increased by 74% between 2014 and 2016, Medicare Part D spending for the EpiPen would have increased from $344 per prescription in 2014 to $600 per prescription in 2016—more than an eight-fold increase since 2007.”
    Meanwhile “The embattled chief executive of Mylan, the company behind the severe allergy treatment EpiPen, plans to defend her company’s decision to sharply raise prices on the product when she faces lawmakers in a congressional hearing on Wednesday afternoon.” http://www.nytimes.com/2016/09/22/business/mylan-chief-to-insist-epipen-is-priced-fairly-at-house-hearing.html

  2. HAR says:

    In a settlement announced Friday, Mylan, Inc., the maker of EpiPens, will shell out $465 million to the Department of Justice and other federal agencies to brush aside any questions about its Medicaid rebates. According to the Centers for Medicare and Medicaid Services (CMS) Mylan has been stiffing federal and state governments out of millions of dollars’ worth of rebates by misclassifying EpiPens. The CMS said that it had notified Mylan of the mistake “on multiple occasions” since 2007, when the company bought the EpiPen from Merck.
    With the $465 million settlement, Mylan hopes to improve its public image. However, as part of the agreement, the company doesn’t have to admit to any wrongdoing.
    The disagreement between the CMS and Mylan centers around how to classify EpiPens under the Medicaid Drug Rebate Program, which requires drug makers to offer the government rebates if their drugs are covered by Medicaid and Medicare. According to the CMS, EpiPen, which currently has no generic version and is under patent protection, is clearly a brand name, single-source drug. As such, the Medicaid Drug Rebate Program requires Mylan pay a rebate of 23.1 percent to the government. Also, Mylan would be required to cough up extra rebates any time it raised the price of its brand name drug at a rate higher than inflation, which it did—15 times. But, Mylan reported to the CMS that the EpiPen is a generic. As such, the company has only been paying 13 percent rebates and not shelling out anything after price hikes.
    Although the government has not released an estimated total of how much Mylan underpaid, the Minnesota Department of Health estimates that Mylan cost that state alone $4.3 million just in 2015. Under the terms of the settlement with the DOJ, Mylan will be clear of any liability claims by the federal and state governments related to EpiPens classification and rebates.

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