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EpiPen maker Mylan to pay $465M to settle claims it overbilled Medicaid

By
Doug G. Ware
Mylan Inc. CEO Heather Bresch points to a graph chart showing the company's EpiPen cost vs average revenue as she testifies before the House Oversight and Government Reform Committee in Washington on Sept. 21. On Friday, the company agreed to pay $465 million to the government to settle claims it overbilled Medicaid for EpiPen sales for five years, saving the pharma company millions of dollars. Photo by Mike Theiler/UPI
Mylan Inc. CEO Heather Bresch points to a graph chart showing the company's EpiPen cost vs average revenue as she testifies before the House Oversight and Government Reform Committee in Washington on Sept. 21. On Friday, the company agreed to pay $465 million to the government to settle claims it overbilled Medicaid for EpiPen sales for five years, saving the pharma company millions of dollars. Photo by Mike Theiler/UPI | License Photo

CANONSBURG, Pa., Oct. 7 (UPI) -- Embattled pharmaceutical company Mylan agreed Friday to pay nearly a half-billion dollars to settle claims that it has overbilled Medicaid for its life-saving EpiPen product.

Mylan will pay $465 million to the government over the claims, the company said in a news release.

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Federal lawmakers and health officials said Mylan wrongly classified the EpiPen as a generic product instead of a brand product -- allowing the Pennsylvania-based company to avoid paying steeper rebates to the Medicaid program.

RELATED September: Mylan clears extra $164M in profit that CEO didn't tell Congress

Such rebates for Medicaid patients are required by law, but amounts vary among generic and brand drugs.

Because Mylan paid lower rebates (13 percent), the complaints said, it didn't pay Medicaid what it truly owed for a brand name drug (23 percent), The Wall Street Journal reported.

Friday, Mylan acknowledged the pricey settlement but noted that the agreement is not an admission of wrongdoing.

"Entering into this settlement is the right course of action at this time for the Company, its stakeholders and the Medicaid program," CEO Heather Bresch said in a statement.

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RELATED August: Senators question price increase of EpiPens from $57 to $500

The overbilling saved Mylan millions of dollars over a five-year period, the Journal report said.

The settlement is another setback for the company, which was accused of price-fixing in August regarding the EpiPen -- an auto-injecting dose of epinepherine for patients with anaphylaxis, a severe allergic reaction that can cause death if not treated immediately.

Bresch testified before Congress about the price-fixing concerns, but understated the profit margin Mylan receives from sales of EpiPens.

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