Photo: Diego M. Radzinschi/ALM

 

Mylan has agreed to pay $465 million to settle claims that the Pennsylvania-based drugmaker misclassified its EpiPen allergy medication to avoid paying Medicaid rebates.

The settlement ends a qui tam action initiated by drugmaker Sanofi-Aventis and Ven-A-Care, a Florida pharmacy, that alleged Mylan improperly classified the EpiPen as a generic drug in an effort to underpay rebates owed to Medicaid. The suit specifically alleged the company violated the False Claims Act.

The U.S. Attorney’s Office for the District of Massachusetts, which handled the case, announced the agreement Thursday morning.

Mylan, which is incorporated in Canonsburg, Pennsylvania, faced a public outcry and a dramatic Senate hearing last year over a dramatic hike in its pricing of the medication.

Federal attorneys had pointed to the fact that the EpiPen-a life-saving allergy auto-injector-had no FDA-approved equivalent drugs, and said Mylan marketed and priced the medication as a brand name drug, noting that the company raised the price more than 400 percent between 2010 and 2016.

“Mylan misclassified its brand name drug, EpiPen, to profit at the expense of the Medicaid program,” acting U.S. Attorney for the District of Massachusetts William Weinreb said in a statement to the press. “Taxpayers rightly expect companies like Mylan that receive payments from taxpayer-funded programs to scrupulously follow the rules.”

Mylan’s communications office did not immediately return a call for comment.

In a statement to the press, Mylan CEO Heather Bresch said in the past year the company has taken steps to increase access to the drug, including launching a half-priced generic version.

“Bringing closure to this matter is the right course of action for Mylan and our stakeholders to allow us to move forward,” Bresch said in the statement. “Mylan has always been committed to providing patients in the U.S. and around the world with access to medicine, and we look forward to continuing to deliver on this mission.”

The statement also noted that the settlement did not include any admission of wrongdoing, but that the company will reclassify the EpiPen and has entered into a “Corporate Integrity Agreement” with the U.S. Health and Human Services’s Office of Inspector General.

 

Contact Max Mitchell at mmitchell@alm.com.