Mylan has agreed to pay $465 million to settle claims that the Pennsylvania-based drugmaker misclassified its EpiPen allergy medication to avoid paying Medicaid rebates.
The settlement ends a qui tam action initiated by drugmaker Sanofi-Aventis and Ven-A-Care, a Florida pharmacy, that alleged Mylan improperly classified the EpiPen as a generic drug in an effort to underpay rebates owed to Medicaid. The suit specifically alleged the company violated the False Claims Act.
The U.S. Attorney's Office for the District of Massachusetts, which handled the case, announced the agreement Thursday morning.
Mylan, which is incorporated in Canonsburg, faced a public outcry and a dramatic Senate hearing last year over a dramatic hike in its pricing of the medication.
Federal attorneys had pointed to the fact that the EpiPen—a life-saving allergy auto-injector—had no U.S. Food and Drug Administration-approved equivalent drugs, and said Mylan marketed and priced the medication as a brand-name drug, noting that the company raised the price more than 400 percent between 2010 and 2016.
"Mylan misclassified its brand name drug, EpiPen, to profit at the expense of the Medicaid program," acting U.S. Attorney for the District of Massachusetts William Weinreb said in a statement to the press. "Taxpayers rightly expect companies like Mylan that receive payments from taxpayer-funded programs to scrupulously follow the rules."
In a statement to the press, Mylan CEO Heather Bresch said in the past year the company has taken steps to increase access to the drug, including launching a half-priced generic version.
"Bringing closure to this matter is the right course of action for Mylan and our stakeholders to allow us to move forward," Bresch said in the statement. "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."
The statement also noted that the settlement did not include any admission of wrongdoing, but that the company will reclassify the EpiPen and has entered into a "Corporate Integrity Agreement" with the U.S. Health and Human Services' Office of Inspector General.
Sanofi lodged its case in July in the U.S. District Court for the District of Massachusetts, but it raised the matter to the U.S. Attorney's Office in 2014. The company had been selling another epinephrine auto-injector at the time called Auvi-Q, and was reporting it as a name-brand drug to the Medicaid Drug Rebate Program.
That program subjects name brand or single-source drugs to a higher rebate that includes an adjustment for inflation. Until recently, the rebate for generic drugs did not account for that inflation-related increase.
According to the U.S. Attorney's Office press release, Sanofi is set to recover $38.7 million as part of the agreement.
A statement from Sanofi said Mylan had engaged in anti-competitive practices.
"Although we no longer own the rights to Auvi-Q, we continued to move this matter forward because it was the right thing to do," spokeswoman Anna Robinson said. "The practices used by Mylan injured consumers by unfairly restricting access to other epinephrine auto-injectors including Auvi-Q."
Mylan was represented by Mitchell Zamoff of Hogan Lovells, according to settlement papers. Attorney Robert Thomas Jr. of the Whistleblower Law Collaborative represented Sanofi, and Tallahassee attorney John Lockwood represented Ven-A-Care.