PITTSBURGH _ Generic drug giant Mylan announced Thursday it has finalized its settlement with the U.S. Department of Justice for overcharging Medicaid for the EpiPen.
The settlement amount is $465 million, unchanged from when Mylan announced a preliminary deal in October that was criticized by lawmakers and others as not being harsh enough.
The EpiPen emergency allergy shot has been classified as a generic instead of a brand name drug for many years, allowing Mylan to pay lower rebates to Medicaid and resulting in states paying more for the product. Drug companies are responsible for ensuring that their products are correctly classified.
Mylan said Thursday it would reclassify the auto-injector as a brand name, or innovator drug, and pay the higher rebates under the Medicaid Drug Rebate Program effective April 1, 2017.
The settlement does not contain an admission or finding of wrongdoing, the company said.
"The settlement provides for resolution of all potential Medicaid rebate liability claims by the federal government, as well as potential claims by certain hospitals and other covered entities that participate in the 340B drug pricing program," Mylan said in a news release.
The deal also "allocates money to the Medicaid programs of all 50 states and establishes a framework for resolving all potential state Medicaid rebate liability claims within 60 days," the statement said.
Last fall, the preliminary settlement was blasted by Sen. Elizabeth Warren, D-Mass., as "shockingly soft."
Sen. Chuck Grassley, R-Iowa, was another early, vocal critic. He had scheduled a hearing to probe the settlement in November but canceled it after Mylan and the justice department refused to show. At the time, Grassley said the Senate Judiciary Committee was considering rescheduling the hearing with witness subpoenas.
In June, Grassley said data he received from the U.S. Department of Health and Human Services indicated the government may have overpaid for the EpiPen by as much as $1.27 billion.
"As we said when we announced the settlement last year, bringing closure to this matter is the right course of action for Mylan and our stakeholders to allow us to move forward," CEO Heather Bresch said in the news release Thursday.
Besides the Medicaid issue, Mylan faced widespread backlash last year for raising the price of the EpiPen by some 500 percent in recent years. The company, which is incorporated in the Netherlands but is run from executive offices outside Pittsburgh, responded by releasing a generic version that lists for half the price.
