Mylan may have overcharged U.S. for EpiPen by $1.27 billion: HHS

By Michael Erman

NEW YORK (Reuters) – The U.S. government may have overpaid drugmaker Mylan N.V. by as much as $1.27 billion between 2006 and 2016 for its EpiPen emergency allergy treatment, the Department of Health and Human Services said on Wednesday.

The amount is nearly three times a proposed settlement that the company announced in October.

The analysis on the EpiPen payments, which was conducted by the Department of Health and Human Services’ Office of Inspector General, was released by Republican Senator Chuck Grassley.

“Mylan and the Obama Administration reportedly were close to settling the overpayment for much less than $1.27 billion,” Grassley said in a statement. “Taxpayers have a right to know what happened here and to be repaid whatever they are owed.”

Grassley is the chairman of the Senate Judiciary Committee, which launched a probe of EpiPen pricing last year.

Mylan did not have an immediate comment.

The company, which was already under fire for steep price increases on the devices, said in October it agreed to settle with the U.S. government for $465 million after it was accused of improperly classifying EpiPen with the Medicaid Drug Rebate Program as a generic treatment.

Mylan, which did not admit wrongdoing, has said it is still working to finalize the settlement.

Drugmakers pay a rebate of 13 percent to state Medicaid programs on sales of generics, rather than a minimum rebate of 23.1 percent on branded drugs.

Mylan shares were down 1.1 percent, or 45 cents, at $38.91 in late trading on Wednesday.

Earlier in the day, a group of investment funds urged shareholders to vote against the re-election of the company’s directors after it paid Chairman Robert Coury over $97 million last year.

(Reporting by Michael Erman; Editing by Leslie Adler)