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Mylan agrees $465m settlement over EpiPen misclassification

Published on 10/10/16 at 09:35am

In the latest scandal in the EpiPen price hike saga, the US Department of Justice has made claims that the drug’s owner Mylan intentionally misclassified the epinephrine auto-injector under the Medicaid rebate programme. The company has rejected the claims and has agreed to settle the claims with a payment of $465 million.

The claims follow the revelation that Mylan had overcharged the government for the product for years, according to the US Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS). Mylan paid a rebate of 13% of EpiPen’s total list price due to its classification as a non-innovator drug, rather than 23.1% for branded drugs, a move which prompted three US senators to request a Justice Department investigation.

This settlement resolves "all potential rebate liability claims by federal and state governments", while the company reduces its full-year earnings guidance to $4.70 - $4.90 per share.

“This agreement is another important step in Mylan's efforts to move forward and bring resolution to all EpiPen Auto-Injector related matters," commented CEO Heather Bresch. "Entering into this settlement is the right course of action at this time for the company, its stakeholders and the Medicaid programme." 

Mylan’s shares leapt up by 10% following the news.

Matt Fellows

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