Republican Sen. Chuck Grassley wants to know if the drug manufacturer of EpiPens overcharged states by misclassifying its product and, if it did, what steps the federal agency overseeing Medicaid did to stop it.
In letters to both Mylan and the Centers for Medicare and Medicaid (CMS), Grassley asked for communications between the two, if civil penalties were imposed and if the Office of the Inspector General was notified.
“It’s important for companies that participate in public health care programs to follow the letter and the spirit of the law,” Grassley said in a news release. “It’s equally important for federal agencies to make sure no companies are allowed to game the system.”
Mylan first gained attention this summer after consumers complained prices for a two pack of the epinephrine injectors had skyrocketed to more than $600. Grassley, chairman of the Senate Judiciary Committee, wrote to Mylan Chief Executive Officer Heather Bresch in August and held a hearing in September.
Grassley asked Mylan to provide clear accounting of what goes into the high cost and the basis for which Mylan is seeking classification of the EpiPen as a preventive drug to increase health insurance coverage of the item.
Reuters reported in late September that CMS told the company “on multiple occasions” that its classification was wrong. Mylan has been paying a 13 percent rebate to Medicaid — which considers the product a generic drug — instead of a 23.1 percent rebate, which applies to innovator drugs, according to Grassley’s office.
Grassley asked CMS how many times it notified Mylan that the EpiPen was misclassified to determine how much money the company should have paid during the course of the rebate program.
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“It would be helpful for Congress and the American public to understand what steps, if any, the Obama Administration has taken under its authorities to ensure companies are not gaming the system and are appropriately held accountable for misclassifying their products,” Grassley wrote in an Oct. 3 letter to CMS Administrator Andrew Slavitt.
Iowa Attorney General Tom Miller, at the request of Grassley, is looking into whether Iowa taxpayers were overcharged. EpiPen prices have increased more than 45 percent each year for the past three and a half years for the state of Iowa, according to Grassley’s office, but it is not clear how the Medicaid rebate contributed to the cost.
Former Lt. Gov. Patty Judge, a Democrat running against Grassley in the November election, however, said he is spending too much time writing letters after the fact and not proactively preventing the price increases.
“The cost of prescription drugs, including EpiPens, is out of control, and for many this has become a crisis,” she said via email. “It’s time to lower prescription drug costs and increase transparency and accountability to stop outrageous price hikes for lifesaving medication.”