Americans May Have Been Overcharged $1 Billion For EpiPen Devices

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According to a U.S. senator who made the remark on Wednesday, American taxpayers may have steeply overpaid for EpiPens over the last ten years. How much is steep? $1.27 billion over what should have been the charges.

“The fact that the EpiPen overpayment is so much more than anyone discussed publicly should worry every taxpayer,” said Sen. Chuck Grassley, R-Iowa, chairman of the Senate Judiciary Committee.

It was last October that drugmaker Mylan (MYL), who owns the EpiPen which is used to counteract what could be fatal allergic reactions, agreed to pay $465 million to the federal government in order to settle claims that it had overcharged Medicaid for the devices.

Considering that the company over charged tax payers nearly three times as much as what the settlement agreement was, this is concerning. So how did Grassley notice such a significant disparity? He had asked officials for an accounting of EpiPen overcharges and learned of the amount from the Department of Health and Human Services’ Office of Inspector General.

Apparently Mylan had classified its EpiPen as a generic drug for years and was able to pay a lower rebate rate to Medicaid as part of Medicaid’s drug rebate program. Officials believe that EpiPen should have been classified instead as a brand-name product.

“It looks like Mylan overcharged the taxpayers for years with the knowledge EpiPen was misclassified, and the previous administration was willing to let the company off the hook,” Grassley said. This was in referral to the Obama administration before Donald Trump took office.

What’s worse is that according to Grassley, the federal centers for both Medicare and Medicaid Services had “recently provided records to the committee that show Mylan was made aware of the misclassification years ago but did nothing.”

A Mylan spokeswoman said, ”We have no comment beyond that we continue to work with the government to finalize the settlement as soon as possible.”

Disclaimer: We have no position in Mylan Br (NASDAQ: MYL) and have not been compensated for this article.