Sen­a­tors ask Jus­tice Depart­ment to in­ves­ti­gate EpiPen maker

Daily Local News (West Chester, PA) - - BUSINESS - By Mary Clare Jalonick

WASH­ING­TON >> Sen­a­tors are ask­ing the Jus­tice Depart­ment to in­ves­ti­gate whether phar­ma­ceu­ti­cal com­pany My­lan acted il­le­gally when it clas­si­fied its life-sav­ing EpiPen as a generic drug and qual­i­fied for lower re­bate pay­ments to states.

The chair­man of the Se­nate Ju­di­ciary Com­mit­tee, Sen. Charles Grass­ley, R-Iowa, and Demo­cratic Sens. Richard Blu­men­thal of Con­necti­cut and Amy Klobuchar of Min­nesota sent a let­ter to At­tor­ney Gen­eral Loretta Lynch on Wed­nes­day and sug­gested the com­pany may have gamed the sys­tem to di­vert mil­lions of dol­lars from tax­pay­ers.

My­lan CEO Heather Bresch has come un­der fire in Congress as the price of the emer­gency al­lergy shots has sky­rock­eted in re­cent years. The list price of EpiPens has grown to $608 for a two-pack, an in­crease of more than 500 per­cent since 2007.

At a House hear­ing last week, Bresch said her com­pany, with sales in ex­cess of $11 bil­lion, doesn’t make much profit off each pen and she sig­naled that My­lan has no plans to lower prices. Repub­li­cans and Democrats crit­i­cized her for be­ing vague about the com­pany’s fi­nances and profits.

In the let­ter, the sen­a­tors said that My­lan “may have know­ingly

mis­clas­si­fied EpiPens, po­ten­tially in vi­o­la­tion of the False Claims Act and other statutes.”

Un­der the Med­i­caid Drug Re­bate Pro­gram cre­ated by Congress, drug com­pa­nies

pay a per­cent­age of their rev­enues to states — known as re­bates — to try and help pro­tect states from high drug prices. The drug com­pa­nies them­selves are re­spon­si­ble for de­cid­ing whether their prod­ucts should be clas­si­fied as non-in­no­va­tor drugs, which pay smaller re­bates to the states, or in­no­va­tor drugs,

which pay larger re­bates.

My­lan has clas­si­fied the EpiPen as a non-in­no­va­tor mul­ti­ple source drug. That clas­si­fi­ca­tion usu­ally is re­served for older drugs avail­able from mul­ti­ple sell­ers. That means the com­pany is pay­ing lower re­bates, even though there is cur­rently no di­rect com­peti­tor to the EpiPen.

PABLO MARTINEZ MONSIVAIS - THE AS­SO­CI­ATED PRESS

In this Sept. 21, 2016, photo, EpiPens brought by My­lan CEO Heather Bresch are seen on Capi­tol Hill in Wash­ing­ton as she tes­ti­fied be­fore the House Over­sight Com­mit­tee hear­ing on EpiPen price in­creases. Sen­a­tors are ask­ing the Jus­tice Depart­ment to in­ves­ti­gate whether phar­ma­ceu­ti­cal com­pany My­lan acted il­le­gally when it clas­si­fied its life-sav­ing EpiPen as a generic drug and qual­i­fied for lower re­bate pay­ments to states.

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