Mylan could be facing another issue when it comes to the EpiPen, a drug used to treat severe allergic reactions that has seen a price increase of more than 500% since 2007.
The company’s stock was down by more than 4% Friday shortly after Sen. Ron Wyden of Oregon and Rep. Frank Pallone of New Jersey said they sent a letter asking about a possible misclassification of the EpiPen under the Medicaid program. Mylan’s stock has fallen by 17% since the debate around the EpiPen’s price began to heat up on August 22.
The letter, sent to Sylvia Burwell, the secretary of the Department of Health & Human Services, asked for more information about whether the EpiPen had been classified as a generic drug (specifically something called a “Non-Innovator Multiple Source Drug”) instead of a branded drug, which may have led Mylan to underpay Medicaid.
Mylan said in a statement emailed to Business Insider that the classification issue stemmed from a new rule that was introduced this year.
“The rule establishes a new process for pharmaceutical companies to follow if they have products, like EpiPen, approved under a what the FDA calls a ‘new drug application’ that they believe should continue to be treated as a non-innovator drug,” Mylan said in the statement. “The new process requires the submission of an application for non-innovator status to be submitted to CMS on or before April 1, 2017. Pursuant to the new rule, Mylan intends to file an application for non-innovator status regarding EpiPen on or before April 1, 2017.”
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Late on Thursday, Sen. Amy Klobuchar of Minnesota also called out the classification.
“I am deeply troubled by Mylan’s misclassification of the EpiPen as a generic drug,” Klobuchar said in a statement. “The Minnesota Department of Human Services has estimated that this misclassification will cost our state more than $4 million in overpayment this year alone. That’s just one state, over the course of one year, for one drug.”
Wyden also tweeted his concerns:
— Ron Wyden (@RonWyden) September 2, 2016
In the face of outrage over the price of the EpiPen, Mylan said on Monday that it would make an “authorized generic” version of the EpiPen that would cost $300 for a two-pack, half the cost of the branded drug. It will continue to produce the branded version with a list price of $600 for a two-pack. To fend off public outrage over the EpiPen’s cost – which has risen by 500% since Mylan acquired the drug in 2007 – the company had also previously raised its copay-coupon system to cover $300 of people’s out-of-pocket cost.
But that discount did little to get it out of the woods.
Mylan has said it plans to launch the generic product in “several weeks,” depending on when it can whip up the new labels.
Here’s Mylan’s full statement:
“Mylan has complied with all laws and regulations regarding the Medicaid rebate classification of EpiPen Auto-Injector. EpiPen meets the definition of ‘non-innovator’ drug in the Medicaid rebate law. EpiPen has been classified as a non-innovator since long before Mylan acquired the product. Mylan’s classification of EpiPen as a non-innovator drug is consistent with longstanding written guidance from the federal government. Just this year, the government adopted a new rule intended to clarify ambiguities in the Medicaid rebate law. The rule establishes a new process for pharmaceutical companies to follow if they have products, like EpiPen, approved under a what the FDA calls a ‘new drug application’ that they believe should continue to be treated as a non-innovator drug. The new process requires the submission of an application for non-innovator status to be submitted to CMS on or before April 1, 2017. Pursuant to the new rule, Mylan intends to file an application for non-innovator status regarding EpiPen on or before April 1, 2017. It would be premature to comment further on this issue until CMS makes its decision on our application.”