On October 7th, Mylan, the company who manufactures EpiPen, settled a Federal Claims lawsuit with the Department of Justice for $465 million.
The agreement has since caused criticism among members of the government. Senator Elizabeth Warren (Massachusetts) voiced her disapproval in a letter to Attorney General Loretta Lynch on Friday. Warren’s staff had calculated that Mylan underpaid Medicaid by nearly $530 million through fraudulent rebates.
“The Justice Department has rewarded Mylan by imposing a fine that is about $65 million less than the amount Mylan made by defrauding Medicare and Medicaid. In addition, you permitted Mylan to avoid admission of wrongdoing, collected no additional penalties under the False Claims Act, and blocked other actions against the company that would have required greater accountability,” wrote Warren.
The source of the False Claims suit against Mylan, to clarify, originates from their classification as a generic drug since 1997. Under this classification, among others, allowed EpiPens to have a reduced discount from 23 percent for name-brand classification, to 13 percent. The US government spent over $1 billion last year on the life-saving drug, resulting in Mylan shorting Medicare and Medicaid hundreds of millions of dollars.
Senator Richard Blumenthal (Connecticut) has recently called for the DOJ to reject the settlement, and to initiate a criminal investigation of Mylan’s business practices. Blumenthal shares Warren’s stance on the matter, describing the actions by the DOJ as “inadequate” and a “sweetheart deal” for the company.
In reference to the details disclosed by Mylan of the agreement, Warren wrote “If these details are correct, they reveal the settlement to be shockingly weak, with no criminal penalty and no deterrent value to prevent drug companies from engaging in abusive schemes to defraud Medicaid and rip off taxpayers.”
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