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Mylan Says It’s Close to Inking an EpiPen Medicaid Settlement

November 10, 2016

Mylan's EpiPenMylan's EpiPen
Mylan's EpiPenPhotograph by Getty Images

Generic drugmaker Mylan said on Wednesday it was working to finalize a settlement with the U.S. government over Medicaid rebates for its EpiPen emergency allergy treatment, adding that money set aside for the settlement led to a third quarter loss.

The company had previously said it agreed to terms of a settlement set at $465 million. However the U.S. Justice Department and other agencies have yet to confirm any such agreement.

The dispute involves the classification of EpiPen as a generic rather than a branded product, which led to significantly smaller rebates to state Medicaid programs.

Mylan (MYL) has been under investigation and faced harsh criticism over steep price increases for its life-saving auto-injector used for severe allergic reactions.

Chief Executive Heather Bresch, on a conference call with analysts, said high deductible health plans and pricing pressure had created U.S. headwinds for its business.

“We wish we had better anticipated the acceleration of rising out-of-pocket costs” for our customers, she said.

With the distraction of the U.S. presidential election over, Bresch said she hoped to be part of a discussion aimed at finding solutions to better transparency around the complexities of drug pricing.

Mylan’s announcement earlier this year of a near doubling of the price for a pair of EpiPen injectors to $600 set off a firestorm of criticism from parents, politicians and patient advocates.

The company said it expects EpiPen to account for 6% of total sales in 2017.

Mylan has virtually had the market for emergency allergy auto-injectors to itself. However, competition is coming. Last month, privately held Kaleo announced plans for a U.S. relaunch of its Auvi-Q injector in the first half of next year following a product recall.

While Mylan works to integrate recent acquisitions, Bresch said business development plans will focus on smaller bolt-on acquisitions, perhaps to enhance a particular therapeutic area.

“It’s buyer’s market. I think there’s great assets out there,” Bresch said. “We don’t need to do any big acquisitions.”


Mylan posted a net loss of $119.8 million for the third quarter, or 23 cents per share, compared with a profit of $428.6 million, or 83 cents per share, a year ago.

Excluding items, such as the settlement expense, Mylan said it had adjusted earnings of $1.38 per share. Analysts on average expected $1.45, according to Thomson Reuters I/B/E/S.

Mylan stuck with its recently lowered full-year forecast for adjusted earnings of $4.70 to $4.90 per share, and maintained its 2018 earnings projection of $6 per share.

It said it expects to see generic drugs price erosion in the mid-single digits range for the rest of the year.

Revenue for the quarter of $3.06 billion was just short of Wall Street estimates of $3.12 billion.