Pharmaceutical companies Mylan Inc. and Mylan Specialty L.P. have agreed to pay $465 million to resolve allegations that they violated the False Claims Act by knowingly misclassifying EpiPen as a generic drug to avoid paying rebates owed primarily to Medicaid.
Mylan Inc. and Mylan Specialty L.P. are both wholly owned subsidiaries of Mylan N.V., which is headquartered in Canonsburg, Pennsylvania.
The settlement resolved the government's allegations that Mylan, by erroneously reporting EpiPen as a generic drug to Medicaid despite the absence of any therapeutically equivalent drugs, was able to demand massive price increases in the private market while avoiding its corresponding rebate obligations to Medicaid. Between 2010 and 2016, Mylan increased the price of EpiPen by approximately 400 percent yet paid only a fixed 13 percent rebate to Medicaid during the same period, the government asserted. The government further alleged that although Mylan was well-aware that its drug was not a generic, it nevertheless claimed generic status for EpiPen in the Medicaid program to avoid paying a higher rebate.
The settlement resolved allegations brought in a lawsuit filed under the whistleblower provisions of the False Claims Act, which permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The whistleblower in this case was the pharmaceutical manufacturer, Sanofi-Aventis US LLC. It will receive approximately $38.7 million as its share of the federal recovery.
Mylan also has entered into a corporate integrity agreement with the Department of Health and Human Services Office of Inspector General that requires, among other things, an independent review organization to annually review multiple aspects of Mylan's practices relating to the Medicaid drug rebate program.
The case was captioned United States ex rel. Sanofi-Aventis US LLC v. Mylan Inc., No. 16-CV-11572 (D. Mass.).
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].