Colorado set to receive $5.5 million from settlement with EpiPen maker
Colorado Attorney General Cynthia Coffman has joined several other states in efforts to draft the details of a settlement agreement with the maker of the EpiPen.
The maker, Mylan Inc., faced allegations that it knowingly underpaid rebates owed to states’ Medicaid programs, and has agreed to pay $465 million, about $5.5 million of which would go to Colorado, Coffman’s office said.
Lawsuits against the company alleged that Mylan misclassified the EpiPen, used for emergency treatment of anaphylactic shock from a severe allergic reaction, as a generic drug.
The problem with that classification is no other drug manufacturer makes the Epi-Pen, meaning it is not a generic drug.
The company has been widely criticized over the past few years for raising the price of EpiPen by about 400 percent. Whistleblower complaints filed against the company said it used the misclassification to avoid paying state Medicaid programs rebates they were entitled to.
States, however, didn’t view the situation as a misclassification, but outright fraud.
“Companies who try to rip off Medicaid are taking money that could and should be used to better serve some of our most vulnerable citizens,” Coffman said. “This office, including our Medicaid Fraud Control Unit, will continue to vigorously defend the integrity of the state’s Medicaid program and hold accountable those who try to loot the state coffers for their private interests.”
In a company release on the settlement, Mylan said it doesn’t provide for any finding of wrongdoing on the part of the company or any of its affiliates or personnel.
The company said that the drug’s classification was “longstanding written guidance” from the federal government since 2007, when it had acquired the rights for the drug.
Congress passed the Medicaid Drug Rebate Program in 1990 to ensure that states were not susceptible to price gouging by drug manufacturers.
Under it, single-source medications such as the EpiPen are required to pay higher rebates.
Drugs available from multiple manufacturers, known as generic drugs, pay a much lower rebate, Coffman’s office said.
At that time, a two-pen package of the drug sold for about $94. Since then, the prices has gone to as much as $600.