- Mylan Inc. has agreed to a $465M settlement with the U.S. Department of Justice over allegations that the drug company had improperly classified its EpiPen Auto-Injector as generic in order to avoid paying rebates in the Medicaid Drug Rebate Program.
- The terms of the settlement do not find any wrongdoing on the part of Mylan. Yet the company holds a near monopoly position in providing the emergency food allergy treatment, according to Forbes.
- Mylan stated in a regulatory filing following news of the settlement that the EpiPen Auto-Injector would be classified as a branded drug as of April 1, 2017.
The DOJ's investigation of Mylan's handling of the Medicaid Drug Rebate Program follows heavy public scrutiny over the company's systematic raising of prices for its lifesaving EpiPen. Over the last decade, Mylan had raised the product to over $600 for a packages of two EpiPens, making the product too expensive for a number of families that were once able to purchase the package for $100 in 2007.
The settlement is a result of inquiries by two congress members, Sen. Ron Wyden of Oregon and Rep. Frank Pallone of New Jersey, who wondered how and why Mylan was able to pay far lower than the 13% rebate of the average manufacturer price to Medicaid for its brand-name product, instead of the minimum 23.1% rebate that is required of branded medicines.
Mylan responded to the controversy with a September statement to Business Insider that the company had "complied with all laws and regulations regarding the Medicaid rebate classification of EpiPen Auto-Injector."
The company, which says that there will be changes to its EpiPen consumer discount program and forthcoming launch of a generic product, expects full-year 2016 adjusted earnings per share of $4.70 to $4.90, down from earlier expectations of $4.85 to $5.15. However, the company says that it will stay committed to its target of at least $6.00 in adjusted earnings per share in 2018.