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posted by martyb on Thursday October 06 2016, @11:44AM   Printer-friendly
from the shoulda-got-the-EpiPencils dept.

If you're going to overcharge the U.S. government, you don't want to get caught:

Mylan NV for years overcharged the U.S. Medicaid health program to buy its EpiPen shot, the government said Wednesday, despite being told that it needed to give bigger discounts under the law. From 2011 to 2015, the joint state-federal program for the poor spent about $797 million on EpiPens, the Centers for Medicare and Medicaid Services, or CMS, said in a letter Wednesday. That included rebates of about 13 percent, but the U.S. should have been getting a larger discount of at least 23.1 percent.

While the agency didn't say exactly how much Mylan had overcharged, the amount could be substantial. Under law, companies are required to give [Medicaid] back any price increases they take on brand drugs above the rate of inflation, in addition to the 23.1 percent discount. Mylan, after acquiring the drug in 2007, has raised the price of EpiPen by about sixfold, to over $600 for a package of two. The government has in the past "expressly told Mylan that the product is incorrectly classified," CMS said in the letter, which came in response to an inquiry by Congress. "This incorrect classification has financial consequences for the amount that federal and state governments spend because it reduces the amount of quarterly rebates Mylan owes for EpiPen."

Previously:
EpiPen's Price Increased 400% since 2008
AllergyStop: $50 EpiPen is Production-Ready but...


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  • (Score: 2) by Capt. Obvious on Thursday October 06 2016, @02:22PM

    by Capt. Obvious (6089) on Thursday October 06 2016, @02:22PM (#411101)

    You're right, the whole thing hinges on whether it's a proprietary drug. The letter goes into details as to why even though Wyden filled out the paperwork as though it was non-proprietary (generic) it actually should be classified as a proprietary drug. Their reasoning:

    EpiPen
    is
    approved
    under
    a
    New
    Drug
    Application
    (NDA)
    by
    the
    Food
    and
    Drug
    Administration
    (FDA)
    ,
    has
    patent
    protection,
    and
    has
    no
    FDA-approved
    therapeutic
    equivalents.

    You seem wrong on the complexity. This seems to be a cut and dried case, albeit one that should have been fixed long ago (the wonders of the legal system, somehow filling out the paperwork incorrectly for 20 years isn't something they can stop.).

    You're also wrong on the consequence. It seems generics get a rate of 13% off their average price. Proprietary drugs get 23.1% off the average price (or the best price, if that's better).

    Starting Score:    1  point
    Karma-Bonus Modifier   +1  

    Total Score:   2