Fed­eral govern­ment: My­lan has been over­charg­ing for EpiPens

Pos­si­ble steep penal­ties

Kuwait Times - - HEALTH -

TREN­TON, NEW JER­SEY:

Even the fed­eral govern­ment is ap­par­ently pay­ing too much for EpiPens, along with an­gry pa­tients and in­sur­ers. The sky­rock­et­ing price of the life-sav­ing al­lergy shot, which has trig­gered a storm of crit­i­cism, is only part of the prob­lem. Now the fed­eral govern­ment, re­spond­ing to Con­gres­sional in­quiries, says Med­i­caid for years has been pay­ing too much for EpiPens be­cause the emer­gency shot is clas­si­fied in­cor­rectly as a generic medicine. The fed­eral govern­ment says EpiPen is a branded drug, which means the drug’s maker, My­lan, should have been pay­ing the govern­ment a far higher re­bate un­der the govern­ment’s com­plex pric­ing rules. My­lan, which has been blasted for hik­ing the price of a pair of EpiPens to $608 from $94 since 2007, denies wrong­do­ing. It says that EpiPen meets Med­i­caid’s def­i­ni­tion of a generic prod­uct and that it was clas­si­fied that way when My­lan ac­quired rights to the prod­uct in 2007.

The com­pany could face steep penal­ties, though.

Ac­cord­ing to the Cen­ters for Medi­care & Med­i­caid, man­u­fac­tur­ers that pay in­suf­fi­cient re­bates may be fined by the Depart­ment of Health and Hu­man Ser­vices for vi­o­lat­ing the re­bate rules, sued for over­charg­ing the govern­ment or hit with other penal­ties.

CMS spokesman Aaron Al­bright would not com­ment Thurs­day on whether the agency would try to cor­rect the mis­clas­si­fi­ca­tion of EpiPen, re­coup money, or seek penal­ties from My­lan.

But in a let­ter sent late Wed­nes­day to se­na­tors and con­gress­men prob­ing EpiPen’s ex­or­bi­tant price hikes, Andy Slavitt, act­ing direc­tor of CMS, wrote that EpiPen doesn’t meet the def­i­ni­tion of a generic drug be­cause it was ap­proved as a brand-name drug and is pro­tected by a patent. Slavitt wrote that CMS “has ex­pressly told My­lan that the prod­uct is in­cor­rectly clas­si­fied.”

Al­bright couldn’t im­me­di­ately say when My­lan was told that, but said the phar­ma­ceu­ti­cal in­dus­try was given guide­lines ex­plain­ing the clas­si­fi­ca­tions in 2010. For nine years, the govern­ment says, My­lan has been pay­ing re­bates of 13 per­cent, as re­quired for generic prod­ucts when it should have been pay­ing the 23.1 per­cent re­bate re­quired for brand-name drugs.

In ad­di­tion, CMS said My­lan hasn’t been pay­ing Med­i­caid a sec­ond re­bate that is re­quired when­ever the price of a brand-name drug price rises more than in­fla­tion. The price of an Epipen pack rose 23 per­cent a year on av­er­age be­tween 2007 and 2016. In­fla­tion has av­er­aged less than 2 per­cent a year over the same pe­riod. The prior maker of EpiPen ap­par­ently also was un­der­pay­ing. CMS records in­di­cate the prod­uct’s sta­tus was changed from brand-name to generic in the fourth quar­ter of 1997, ac­cord­ing to Slavitt’s let­ter. — AP

WASH­ING­TON: In this Wed­nes­day, Sept 21, 2016, file photo, My­lan CEO Heather Bresch holds up EpiPens while tes­ti­fy­ing on Capi­tol Hill, be­fore the House Over­sight Com­mit­tee hear­ing on EpiPen price in­creases. —AP

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