The EpiPen emergency allergy treatment of Mylan NV has come under intense scrutiny after a series of drastic price increases and the company said on Friday that it will pay $465 million to settle questions of whether it underpaid U.S. government healthcare programs by misclassifying its EpiPen emergency allergy treatment.
The devices have been allegedly made unaffordable for a growing number of families as the company has raised prices on the lifesaving EpiPen six fold to over $600 for a package of two in less than a decade and for this Mylan has been lambasted by consumers and lawmakers.
Much smaller rebates to the government health plans were resulted due to classificaiotn of the product as a generic product and questions about whether Mylan made more money on EpiPen than warranted from state Medicaid programs is being tried ot be determined by lawmakers.
For the price increase and they were skeptical of her profit analysis of the product, Mylan Chief Executive Heather Bresch was grilled by the House Committee on Oversight and Government Reform.
The Medicaid plan for the poor spent $797 million on EpiPen between 2011 and 2015, including rebates provided by Mylan, or $960 million before rebates, said the Centers for Medicare and Medicaid Services this week, in response to a request from U.S. Senator Amy Klobuchar of Minnesota.
By misclassifying EpiPen as a generic instead of a branded drug Mylan underpaid Medicaid rebates, lawmakers have contended. Compared with a minimum 23.1 percent for a branded drug, the Medicaid rebate for a generic is 13 percent.
"I am glad the Department of Justice pursued this so quickly," Klobuchar said in a statement.
"If other drugs are misclassified, and surely EpiPen isn't the only one ... the taxpayers need to get their money back."
Congress should investigate whether Mylan violated the law, said Senator Richard Blumenthal of Connecticut who blasted the settlement as too small. "This settlement is a shadow of what it should be - lacking real accountability for Mylan’s apparent lawbreaking," he said in a statement.
EpiPen will be classified as a branded drug as of April 1, 2017, Mylan said in a regulatory filing on Friday.
Mylan plans to launch a $300 generic version of EpiPen as soon as possible this year, Bresch told lawmakers this week.
Mylan affirmed its 2018 forecast and its shares rose 11 percent to $39.90 after hours but the drugmaker also lowered its 2016 earnings outlook.
"Kudos to management for fast action. This was one of the major risks everyone was focusing on ... now it is essentially off the table," AB Bernstein analyst Ronny Gal said in a video message to investors.
A pretax charge of about $465 million in the quarter ended Sept. 30 will be recorded by Mylan, the company said. The settlement does not include any finding of wrongdoing, the company which will make the payment to the Department of Justice and other government agencies, said.
It now expects full-year 2016 adjusted earnings per share of $4.70 to $4.90, down from $4.85 to $5.15, Mylan said citing changes to the EpiPen consumer discount program and upcoming launch of a generic version.
(Source:www.reuters.com)
The devices have been allegedly made unaffordable for a growing number of families as the company has raised prices on the lifesaving EpiPen six fold to over $600 for a package of two in less than a decade and for this Mylan has been lambasted by consumers and lawmakers.
Much smaller rebates to the government health plans were resulted due to classificaiotn of the product as a generic product and questions about whether Mylan made more money on EpiPen than warranted from state Medicaid programs is being tried ot be determined by lawmakers.
For the price increase and they were skeptical of her profit analysis of the product, Mylan Chief Executive Heather Bresch was grilled by the House Committee on Oversight and Government Reform.
The Medicaid plan for the poor spent $797 million on EpiPen between 2011 and 2015, including rebates provided by Mylan, or $960 million before rebates, said the Centers for Medicare and Medicaid Services this week, in response to a request from U.S. Senator Amy Klobuchar of Minnesota.
By misclassifying EpiPen as a generic instead of a branded drug Mylan underpaid Medicaid rebates, lawmakers have contended. Compared with a minimum 23.1 percent for a branded drug, the Medicaid rebate for a generic is 13 percent.
"I am glad the Department of Justice pursued this so quickly," Klobuchar said in a statement.
"If other drugs are misclassified, and surely EpiPen isn't the only one ... the taxpayers need to get their money back."
Congress should investigate whether Mylan violated the law, said Senator Richard Blumenthal of Connecticut who blasted the settlement as too small. "This settlement is a shadow of what it should be - lacking real accountability for Mylan’s apparent lawbreaking," he said in a statement.
EpiPen will be classified as a branded drug as of April 1, 2017, Mylan said in a regulatory filing on Friday.
Mylan plans to launch a $300 generic version of EpiPen as soon as possible this year, Bresch told lawmakers this week.
Mylan affirmed its 2018 forecast and its shares rose 11 percent to $39.90 after hours but the drugmaker also lowered its 2016 earnings outlook.
"Kudos to management for fast action. This was one of the major risks everyone was focusing on ... now it is essentially off the table," AB Bernstein analyst Ronny Gal said in a video message to investors.
A pretax charge of about $465 million in the quarter ended Sept. 30 will be recorded by Mylan, the company said. The settlement does not include any finding of wrongdoing, the company which will make the payment to the Department of Justice and other government agencies, said.
It now expects full-year 2016 adjusted earnings per share of $4.70 to $4.90, down from $4.85 to $5.15, Mylan said citing changes to the EpiPen consumer discount program and upcoming launch of a generic version.
(Source:www.reuters.com)