Three members of the U.S. Senate Judiciary Committee, ahead of a planned hearing late this month, said Mylan appears to have greatly overcharged the military for its lifesaving allergy treatment EpiPen and asked the pharmaceutical company when it plans to reimburse the Department of Defense.
The reimbursement demand came in a letter on Monday to Mylan Chief Executive Heather Bresch, from Senate Judiciary Chairman Charles Grassley, an Iowa Republican, and committee members Richard Blumenthal of Connecticut and Amy Klobuchar of Minnesota, both Democrats.
“We are alarmed that Mylan may have overcharged our military for this life-saving drug,” the Senators wrote. They said Mylan for years may have knowingly misclassified EpiPen as a generic product in order to avoid higher rebates the company would have had to pay state and federal Medicaid programs had it been classified as a branded product.
The Medicaid rebate for a generic is 13% compared with a minimum of 23.1% for a branded medicine.
Mylan (MYL) spokeswoman Nina Devlin declined to comment on the letter, or its demands.
The drug company has come under fire from consumers and politicians in recent months for raising the U.S. list price on a pack of two EpiPen injectors nearly six-fold to $600 since 2008. Lawmakers, including Grassley, have called for investigations into Mylan’s pricing, helping put the product in the spotlight amid a larger debate over big drug price increases in the United States.
Pentagon spending on EpiPen jumped to $57 million over the past year from $9 million in 2008, an increase driven by volume and by hefty price hikes that had a bigger bite on prescriptions filled at retail pharmacies, Reuters reported on Oct. 28, citing previously unreported data.
The Pentagon gets a government discount on EpiPens dispensed at military treatment facilities and by mail order. But nearly half of its spending was at retail pharmacies where it most recently paid an average of $509 for EpiPen and $528 for EpiPen Jr two-packs—three times higher than its discounted rate, according to the data.
The Senate Judiciary Committee is slated to hold a hearing Nov. 30 on EpiPen pricing and related matters.