The company behind the lifesaving EpiPen epinephrine injectors – Mylan – may have overcharged the federal government [taxpayers] by $1.27 over ten years, according to a new estimate from the Department of Health and Human Services’ Inspector General.
They incorrectly classifying its signature product under a government rebate program.
Categorizing EpiPens as a generic drug instead of a brand-name product allowed the company to provide Medicaid less in rebates, leaving taxpayers with a bigger bill.
“It looks like Mylan overcharged the taxpayers for years with the knowledge EpiPen was misclassified, and the previous administration was willing to let the company off the hook,” Grassley said in a statement. “The fact that Mylan is unwilling to cooperate and provide documents voluntarily makes me wonder what there is to hide and whether a subpoena is the only way to get to the bottom of this.”
Senator Manchin’s daughter Heather Bresch is the Mylan CEO and she was a big donor to the Clinton Foundation. As she raised the prices of EpiPen by 461%, she also hiked her salary and that of her executives. Her salary rose 671%.
Her salary went from $2,453,456 to $18,931,068.
In 2007 the company bought the rights to EpiPen, a device used to provide emergency epinephrine to stop a potentially fatal allergic reaction and began raising its price, first 5%, then 19%, another 10% and finally 15%.
The stock price more than tripled.
The company spent $1.2 million on lobbying. Likely as a result of the lobbying, the government passed a law giving block grants to states requiring schools to stock EpiPens. Packages of EpiPens were required to be sold with two EpiPens.
The company also killed off the competition.
“This outrageous increase in the price of EpiPens is occurring at the same time that Mylan Pharmaceutical is exploiting a monopoly market advantage that has fallen into its lap,” Sen. Klobuchar said in a public statement. “Patients all over the U.S. rely on these products, including my own daughter. Not only should the Judiciary Committee hold a hearing, the Federal Trade Commission should investigate these price increases immediately.”
Without competition, Mylan has been able to continuously raise their prices on the life-saving medication and injector — there are no companies to offer it for less. There were consumer complaints but they were ignored, Gizmodo reported.
Because of their cozy relationship with the FDA and their questionable practices, Mylan was able to take a drug worth fifty cents and sell it for more than $600.
How They Did It
Apparently anyone can lodge a complaint with the FDA and the FDA can choose to make a case out of it which is what happened with Mylan’s potential competitors.
Citizen petititons can keep a drug or device from FDA approval. When Teva tried to sell a far cheaper generic EpiPen in 2015, Mylan employees filed a citizen’s petition complaining about Teva safety to keep them from market. Mylan apparently relied on this practice.
Epinephrine costs about fifty cents an injection but Mylan has their own FDA-approved injector and any time a competitor comes along with another injector, Mylan’s friends in the FDA would have concerns and keep it from market.
Pharmaceutical companies in general have also squelched competition by, in effect, paying one another to delay the introduction of generic drugs. The Supreme Court ruled in 2013 that regulators could challenge such agreements on antitrust grounds, but did not declare those deals illegal. Congress should pass legislation that would make pay-for-delay agreements illegal.