Senators Urge Mylan To Reimburse Defense Department For EpiPen Overcharges

Image courtesy of Phillip Bradshaw

A week after a report suggested that the Department of Defense had paid full retail price for EpiPens — to the tune of $54 million in overcharges — because the drug’s maker, Mylan, misclassified the live-saving medication, preventing the government from receiving proper rebates, lawmakers are calling on the drugmaker to reimburse those costs. 

Senators Chuck Grassley (IA), Richard Blumenthal (CT), and Amy Klobuchar (MN) sent a letter Monday to Mylan CEO Heather Bresch urging the company to take immediate action to resolve allegations the DoD was overcharged for the life-saving medication.

The lawmakers, all part of the Senate Judiciary Committee, claim that Mylan’s misclassification of the EpiPen as a “non-innovator multiple source drug” led the Department of Defense to pay exorbitant rates for the drug at retail pharmacies.

Under federal law, the Department of Veterans Affairs is required to determine which drugs require manufacturers to provide a refund for purchases made by certain federal agencies including purchases made though the DoD’s retail pharmacy network.

Because Mylan had allegedly misclassified the EpiPen, the senators claim the VA had determined that the drug was not eligible for the DoD retail refund program. This, the senators claim, caused the DoD to pay more than $50 million in excess for the drug than it would have under the refund program.

“The American people have been rightly outraged by Mylan’s excessive pricing and misclassification of its product,” the senators wrote. “Now, it appears that Mylan’s decisions have impacted our Armed Forces, those who have risked their lives to protect our great nation. We urge you to right this wrong quickly and completely.”

The DoD payment issues with the drug came to light last week when a Reuters released an analysis of available data, finding that many of the EpiPens paid for by the DoD were purchased at retail pharmacies instead of military facilities or by mail order, meaning the DoD’s deep discount on the drug did not apply.

As a result, the DoD’s annual spending on the allergy treatment to jump from $9 million in 2008 to $57 million in 2015, according to the report.

“Given Mylan’s stated intent to properly reclassify the EpiPen, Mylan should take immediate action to ensure that service members, their families, and the federal government do not pay excessively for EpiPen,” the senators wrote.

The senators’ letter, which requests a response from Bresch by Nov. 18, comes a month after Mylan agreed to pay $465 million to settle a federal investigation into its Medicaid pricing — without admitting any liability.

That deal, which was called “shamefully weak… shockingly soft” by Massachusetts Sen. Elizabeth Warren, resolved allegations that Mylan had overcharged U.S. taxpayers potentially hundreds of millions of dollars since at least 2011.

In addition to urging Mylan to reimburse the overcharges, the senators on Monday called on the Department of Justice to consider investigating whether Mylan violated the law when it misclassified the EpiPen in order to pay a lower rebate to states and increase profits.

Also, because there are few alternatives to epinephrine — competitor Auvi-Q is set to return to market next year, while Teva’s generic product has hit roadblocks to approval — the senators asked the Food and Drug Administration to answer questions about its process and steps to approve these medications.

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