HHS estimate: Mylan overcharged Medicaid by $1.27B for EpiPens

HHS's Office of Inspector General estimates Mylan may have overcharged Medicaid $1.27 billion for EpiPens over the last decade by improperly classifying the devices as generic products under CMS' rebate program, reports STAT.

Here are four things to know.

1. CMS repeatedly warnedMylan about underpaid rebates to state Medicaid programs due to the misclassification of EpiPens as generic products rather than a branded ones. With a generic classification, Mylan only paid a 13 percent rebate for every EpiPen sold under the rebate program, compared to 23.1 percent for branded drugs.

2. Mylan in October 2016 agreed to a $465 million settlement over the rebates, although the deal is still not finalized. The settlement, which did not require Mylan to classify EpiPens as branded drugs under the rebate program until this April, faced large scrutiny from lawmakers for being too lenient.

3. OIG's calculations, released Wednesday, show taxpayers potentially paid as much as $444 million from 2006 to 2014 and $826 million from 2015 and 2016 for EpiPens, reports STAT. This new estimate far surpasses the proposed $465 settlement amount, notes Sen. Chuck Grassley, R-Iowa.

"The fact that the EpiPen overpayment is so much more than anyone discussed publicly should worry every taxpayer," he said in a statement.

4. OIG said its estimates do not account for "supplemental rebates" states may have collected. The Department of Justice declined STAT's request for comment on the pending settlement.

More articles on supply chain:

Viewpoint: Supply chain needs more diversity
Mallinckrodt considers sale of generic drug unit: 4 things to know
Medicare patients don't see benefits of drug rebates, says researchers

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