U.S. government was informed of EpiPen overcharging in 2009

The U.S. government was informed in 2009 that Mylan’s EpiPen allergy shots were misclassified under Medicaid pricing rules, resulting in “significant” overcharging of taxpayers, Sen. Charles Grassley said.

Grassley, R-Iowa, asked the Department of Health and Human Services inspector general to hand over records related to its notification seven years ago that the Center for Medicare and Medicaid Services was overpaying for the allergy shot.

“It appears the EpiPen was misclassified for years, and CMS was notified of the problem,” Grassley said in a statement Tuesday. “If no one did anything about the misclassification, why not? This could mean hundreds of millions of dollars in taxpayer over-payments occurred without justification.”

CMS declined to comment on Grassley’s letter. The agency said last month that it had told Mylan about the misclassification, declining to specify when it first informed the drug company of the problem.

EpiPen was classified as a generic drug in 1997, enabling Mylan to pay a lower rebate rate than the government Medicaid health program requires for brand-name drugs. The drugmaker, which acquired EpiPen in 2007, has denied it acted improperly. Last month, it announced a $465 million settlement with the government over the Medicaid overcharging.

Grassley is holding a hearing in the Senate Judiciary Committee, which he chairs, on Nov. 30 on EpiPen’s misclassification and invited the inspector general to testify.