Ohio’s Medicaid program will get a reimbursement of $19.6 million from the maker of the EpiPen after years of underpaid rebates.
The payment is part of a larger $465 million settlement between Mylan Inc. and the federal government officially announced by the Department of Justice Thursday.
Mylan is making the repayment to resolve allegations that the company misclassified its EpiPen epinephrine auto-injectors as generic drugs for years to avoid paying larger rebates owed to Medicaid.
Drug companies pay rebates to Medicaid of 23.1 percent for brand-name drugs and 13 percent for generics. Mylan paid only the 13 percent rate for $1 billion worth of EpiPens that Medicaid bought between 2011 and 2015.
Medicaid spent a total of $797 million on EpiPens after the 13 percent rebate during those years according to the Centers for Medicare and Medicaid Services.
But that was at least $59 million more than what the government should have paid if it was getting the correct rebate.
CMS informed Mylan numerous times that their product did not meet the qualifications of a generic drug.
“We are pleased when we are able to announce settlements like this one, when we are able to return money to the Medicaid program,” said Dan Tierney, spokesman for Ohio Attorney General Mike DeWine’s office.
In addition to state Medicaid programs getting a share of the settlement, Mylan competitor Sanofi, which makes the AUVI-Q epinephrine auto-injector will receive $38.7 million plus a share of states’ recovery.
Sanofi raised the issue of the misclassification to the U.S. Attorney’s Office in 2014 and filed a complaint under the False Claims Act.
As part of the settlement, Mylan also entered into a corporate integrity agreement with the federal government that requires an independent review of the company’s practices related to Medicaid for five years.
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