Mylan CEO Heather Bresch has been waging a campaign to keep her job as head of the pharmaceutical company best known for jacking up the price for a life-saving drug that helps save people from asphyxiating during a severe allergic reaction. According to Ars Technica, Mylan is not only in hot water for possibly dubious tax practices, but for misclassifying their EpiPen in order to slither out of the full costs of rebates they should have provided to Medicaid.
Under the Medicaid Drug Rebate Program, drug manufacturers, such as Mylan, can get their products covered by Medicaid if they agree to offer rebates to the government to offset costs. With a brand-name drug such as the EpiPen, which currently has no generic versions and has patent protection, Mylan was supposed to classify the drug as a “single source,” or brand name drug. That would mean Mylan is required to offer Medicaid a rebate of 23.1 percent of the costs, plus an “inflation rebate” any time Mylan raises the price of the brand-name drug at a rate higher than inflation.
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But instead of classifying EpiPen as a “single source” drug, Mylan told regulators that it’s a “non-innovator multiple source,” or generic drug. Under that classification, Mylan is only required to offer a rebate of 13 percent and no inflation rebates.
According to the Center for Medicare and Medicaid Services (CMS):
"CMS has, on multiple occasions, provided guidance to the industry and Mylan on the proper classification of drugs, and has expressly advised Mylan that their classification of EpiPen for the purposes of the Medicaid Drug Rebate Program was incorrect," said CMS spokesman Aaron Albright.
"This incorrect classification has financial consequences for the amount that federal and state governments spend by reducing the amount of quarterly rebates Mylan owes for EpiPen," Albright said.
Three senators (two Democrats and Sen. Chuck Grassley) sent a letter to the Department of Justice asking for a full investigation into Mylan for this very issue.