Two key U.S. congressional committee members on Friday called for an investigation into whether Mylan NV, under fire for raising the price of its EpiPen device, overcharged the government’s low-income healthcare program for the allergy treatment.
In a letter to the secretary of the Department of Health and Human Services, Senator Ron Wyden and Representative Frank Pallone, both Democrats, seek clarification of whether EpiPen was classified as a generic, “non-innovator” drug, or a brand-name drug by the Medicaid program.
Under current law, branded drugs, and generic drugs available from a single source, are required to pay a rebate amount of at least 23.1 percent of the average manufacturer price. Generic drugs are subject to a much lower 13 percent rebate.
Mylan, in an emailed statement, said it has complied with all laws and regulations regarding Medicaid rebates, and intends to file with regulators, by next April as required under new guidelines, for EpiPen to be classified as a “non-innovator” product.
The device jabs a dose of the drug epinephrine into the thigh to counter dangerous allergic reactions such as to peanuts, food allergies and bee stings.
Mylan, whose tax address is in the Netherlands but which has corporate headquarters in Canonsburg, Pennsylvania, has raised the U.S. price of EpiPen from less than $100 when it acquired the product in 2007 to more than $600.
Amid an outcry by parents, consumer groups and U.S. politicians, the company said on Monday it will soon launch the first generic version of the device for $300, half the list price of its branded product.
Wyden, ranking member of the Senate Finance Committee, and Pallone, ranking member of the House Energy Commerce Committee, said in the letter on Friday: “It has recently come to our attention that Mylan has classified EpiPen as a generic drug” under the Medicaid rebate program, even though it is considered a new drug by the Food and Drug Administration.
Shares of Mylan, which fell 4.7 percent to close at $39.97 on Friday, have dropped 19 percent since mid-August.
(Reporting by Deena Beasley in Los Angeles; Editing by Matthew Lewis)