Mylan has reached a $465-million settlement with the US government to resolve claims relating to the classification of the company’s EpiPen Auto-Injector and EpiPen Jr Auto-Injector, auto-injector-based epinephrine products for treating adverse allergic reactions, for purposes of the Medicaid Drug Rebate Program.

In August 2016, Mylan came under US government attention regarding the pricing of the EpiPen Auto-Injector, and in October 2016, the company agreed to the $465-million settlement, which is now finalized.

The question in the underlying matter was whether the EpiPen products were properly classified with the Centers for Medicare and Medicaid Services (CMS) as a non-innovator drug under the applicable definition in the Medicaid Rebate statute and subject to the formula that is used to calculate rebates to Medicaid for such drugs.

Mylan says that the EpiPen Auto-Injector has been classified with the CMS as a non-innovator drug since before Mylan acquired the product in 2007 based on written guidance from the federal government. The Department of Justice had claimed that Mylan had incorrectly classified the product as a generic drug to Medicaid and thus did not pay corresponding rebate obligations as an innovator product to Medicaid.

The settlement provides for resolution of all potential Medicaid rebate liability claims by the federal government as well as potential claims by certain hospitals and other covered entities that participate in the 340B Drug Pricing Program. The settlement allocates money to the Medicaid programs of all 50 states and establishes a framework for resolving all potential state Medicaid rebate liability claims within 60 days.

In connection with the settlement, Mylan also has entered into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. The settlement does not contain an admission or finding of wrongdoing. Mylan will reclassify EpiPen Auto-Injector for purposes of the Medicaid Drug Rebate Program and pay the rebate applicable to innovator products effective as of April 1, 2017.

“As we said when we announced the settlement last year, bringing closure to this matter is the right course of action for Mylan and our stakeholders to allow us to move forward,” said Mylan CEO Heather Bresch in a company statement. “Over the course of the last year, we have taken significant steps to enhance access to epinephrine auto-injectors, including bringing a solution to the fast-changing healthcare landscape in the US by launching an authorized generic version at less than half the wholesale acquisition cost of the brand and meaningfully expanding our patient-access programs. Mylan has always been committed to providing patients in the US and around the world with access to medicine, and we look forward to continuing to deliver on this mission.”

Source: Mylan and US Department of Justice