EpiPen's maker has another problem on its hands

Members of the Senate Finance Committee have questions about EpiPen-maker Mylan’s relationship with Medicaid.

They just sent a letter to Daniel Levinson, the Inspector General of the Department of Health and Human Services to inquire about them.

What the Senators would like to know is whether or not Mylan may have manipulated the Medicaid Drug Rebate Program (MDRP) by classifying EpiPen as a generic drug when it is in fact not.

Mylan started an uproar earlier this month when the price of an EpiPen rose to $608 per pack of two. When Mylan bought the drug in 2007, the price for a pack was around $100. On Wednesday, Mylan’s CEO, Heather Bresch, will go before members of the House of Representatives to answer questions about this.

But apparently the Senate has questions too, and they were prompted by a letter from The National Association of Medicaid Directors (NAMD) who wrote a letter to Congress saying “if EpiPen is considered a generic for Medicaid rebate purposes but is not an actual generic product, it appears Mylan is taking advantage of the MDRP.”

They have done this before

See, brand name drugs have inflation protections with Medicaid that generics don’t. Brand name drugs have to pay higher rebates to states than generics — 23.1% vs. 13%. Also, brand name drugs have to pay additional rebates if their price increases rise more than inflation.

Medicaid spent $42.7 billion on brand and generic drugs last year and got $19.9 million back in rebates from manufacturers last year.

Mylan paid a $124 million fine for misclassifying its drugs and under-paying rebates this way in 2009.

“Given the concerns raised by the NAMD and the past behaviour in the area, we are concerned that the controls in place, if any, are inadequate to ensure that medicaid is receiving the full amount of rebates afforded to it by law,” said the letter.

“Therefore, we write to you today to join our Republican colleagues form the House Energy a& Commerce Committee in their September 12th, 2016, request that the Office of the Inspector General examine CMS [The Center for Medicaid and Medicare] oversight of the MDRP.”

The letter is signed by Senators Chuck Grassley (R-IA), Mike Crapo (R-ID) and Orrin Hatch (R-UT) among others.

Again, this couldn’t come at worse time. Mylan execs are set to testify before the House on Wednesday and on Tuesday the state of West Virginia accused the company of defrauding Medicaid as well.

Reports have also surfaced that Bresch’s mother, Gayle Manchin may have helped push putting EpiPen’s in schools for the company’s EpiPen4Schools program while she was president of the National Association of State Boards of Education.

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