CMS repeatedly warned Mylan that the drugmaker was underpaying rebates to state Medicaid programs by classifying EpiPens as a generic product rather than a branded one. With a generic classification, Mylan only pays a 13 percent rebate for every EpiPen sold under the rebate program compared to 23.1 percent for branded drugs.
While CMS did not disclose how much it overpaid for the EpiPens, recent figures show federal health plans spent more than $1 billion on EpiPens from 2011 to 2015.
In a statement released Friday, Mylan said the settlement — which has not been finalized — did not imply any admission of guilt. The company also said it plans to enter into a corporate integrity agreement with the HHS’ Office of the Inspector General.
“This agreement is another important step in Mylan’s efforts to move forward and bring resolution to all EpiPen Auto-Injector related matters,” Mylan CEO Heather Bresch said in a statement.
EpiPen will be classified as a branded drug beginning April 2017.
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