Senators Want Mylan DoJ Probe
Three members of the Senate Judiciary Committee — Chuck Grassley (R-IA), Richard Blumenthal (D-CT), and Amy Klobuchar (D-MN) — are asking the Department of Justice to investigate whether Mylan Pharmaceuticals violated the law when it apparently misclassified its EpiPen for the Medicaid drug product rebate program. In a 9/28 letter to Attorney General Loretta Lynch, the three say that drug companies are responsible for determining whether their drugs are innovator or “non-innovator multiple source” (NIMS) drugs under the program, which was created to protect states from high drug prices by requiring companies to pay a percentage of their revenues to states as rebates. Companies pay a rebate of 13% of the price of NIMS drugs and a minimum rebate of 23.1% for innovator drugs, with much higher payments possible for drugs that experience large price hikes, the letter says.
According to the senators, Mylan has classified the EpiPen as a NIMS drug since acquiring the product license in 2007. They note that press reports indicate that the Centers for Medicare and Medicaid Services has said that the classification is incorrect.
The law says that NIMS drugs must face at least one FDA-approved competitor, the letter says. “The EpiPen faces no such competitor,” it says, “and it has not since Mylan began selling the product.” The letter also references the fact that there is a higher rebate percentage on innovator drugs because they are generally protected by patents and Mylan sued Teva for patent infringement and ultimately reached a settlement that kept Teva out of the market until late 2015. In addition, the senators say, Mylan petitioned FDA not to grant therapeutic equivalence status to the Teva product.
The senators say that Mylan justifies its NIMS classification based on a 1997 HHS opinion to Dey Laboratories, which marketed the EpiPen at the time, stating that it could be marketed as a NIMS drug. “However, the EpiPen marketed by Mylan is significantly different than the 1997 version,” they write. “Since 2008, the Mylan product has been protected by at least one additional patent. The 1997 HHS opinion to Dey Laboratories may no longer be applicable given all of Mylan’s alterations and additions since then. Further, it is our understanding that classifying the EpiPen as a non-innovator product is inconsistent with industry practice. When Mylan’s competitors market a drug delivery product under a new drug application, at least some of them classify the product as an innovator, even if the drug being delivered is off-patent.”
The letter says that its facts suggest that Mylan may have knowingly misclassified EpiPens, potentially in violation of the False Claims Act and other laws. “The American people have been rightly outraged as Mylan engaged in substantial price increases that resulted in billions of dollars paid by U.S. consumers,” the senators conclude. “They deserve to know whether the company also violated the False Claims Act and diverted millions of dollars from U.S. taxpayers.”