Schneiderman: New York getting $38.5M in settlement with EpiPen maker Mylan Specialty L.P.

New York State is set to receive $38.5 million in a state-federal settlement with Canonsburg, Pennsylvania–based Mylan Inc. (NASDAQ: MYL), the maker of the drugs EpiPen and EpiPen Jr.

New York led a coalition of states in the investigation that resolved allegations that Mylan “knowingly underpaid” rebates owed to Medicaid for the drugs EpiPen and EpiPen Jr. that were dispensed to Medicaid beneficiaries, the office of New York Attorney General Eric Schneiderman said in a news release.

The state is sharing in a $465 million settlement with Mylan and its wholly owned subsidiary Mylan Specialty L.P.

“For nearly seven years, Mylan prioritized its bottom line … and shortchanged the Medicaid program and taxpayers. By misclassifying EpiPen, Mylan attempted to sidestep their obligations, leaving taxpayers to foot the bill,” Schneiderman said in the release. “Pharmaceutical companies should be warned: efforts to shortchange Medicaid will not be tolerated, and we’ll ensure that these companies are held accountable.”

Following a joint federal and state investigation, the settlement resolves allegations that Mylan submitted false statements to the Centers for Medicare and Medicaid Services (CMS) and several states reliant on EpiPen rebates, Schneiderman’s office said.

It also “knowingly underpaid” its obligations for Medicaid drug rebates to the State Medicaid Program for EpiPen.

Mylan CEO Heather Bresch made the following response to the settlement in a news release.

“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. 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 U.S. 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 U.S. and around the world with access to medicine, and we look forward to continuing to deliver on this mission,” Bresch said.

About the case

The settlement resolves allegations that Mylan allegedly submitted false statements to CMS between July 29, 2010 and March 31, 2017.

Those statements “incorrectly” classified EpiPen as a “noninnovator multiple source” drug, as opposed to a “single source” or “innovator multiple source” drug.

It also failed to report a best price to CMS for EpiPen, which is required for all “single source” and “innovator multiple source” drugs.

As a result, Mylan submitted false statements to CMS and several states reliant on EpiPen rebates, and “knowingly underpaid” its obligation for Medicaid drug rebates to the State Medicaid Program for EpiPen.

The settlement also resolves allegations that Mylan Specialty “overcharged” certain entities (known as the “340B covered entities”) that participated in the 340B drug-pricing program.

The investigation stemmed from two whistleblower, or “qui tam,” actions pending in the U.S. District Court for the District of Massachusetts. They allege claims under the federal False Claims Act and various state false-claims statutes that Mylan “underpaid” its rebate obligations to states.

Contact Reinhardt at ereinhardt@cnybj.com