Slashdot Mirror
Feds Go After Mylan For Scamming Medicaid Out of Millions On EpiPen Pricing (arstechnica.com)
An anonymous reader quotes a report from Ars Technica: Over the nine or so years that Mylan, Inc. has been selling -- and hiking the price -- of EpiPens, the drug company has been misclassifying the life-saving device and stiffing Medicaid out of full rebate payments, federal regulators told Ars. Under the Medicaid Drug Rebate Program, drug manufacturers, such as Mylan, can get their products covered by Medicaid if they agree to offer rebates to the government to offset costs. With a brand-name drug such as the EpiPen, which currently has no generic versions and has patent protection, Mylan was supposed to classify the drug as a "single source," or brand name drug. That would mean Mylan is required to offer Medicaid a rebate of 23.1 percent of the costs, plus an "inflation rebate" any time Mylan raises the price of the brand-name drug at a rate higher than inflation. Mylan has opted for such price increases -- a lot. Since Mylan bought the rights to EpiPen in 2007, it has raised the price on 15 separate occasions, bringing the current list price to $608 for a two-pack up from about $50 a pen in 2007. That's an increase of more than 500 percent, which easily beats inflation. But instead of classifying EpiPen as a "single source" drug, Mylan told regulators that it's a "non-innovator multiple source," or generic drug. Under that classification, Mylan is only required to offer a rebate of 13 percent and no inflation rebates. It's unclear how much money Mylan has skipped out on paying in total to state and federal governments. But according to the state health department of Minnesota, as reported by CNBC, the misclassification cost that state $4.3 million this year alone.
The company claimed on official government forms for multiple years that the drug is a generic. Make it so. Job done. The government can do that.
Learn to love Alaska
ban drug ad's on tv!
Or, it could be not malice, but mere stupidity.
It seems there's been a series of unfortunate events affecting Mylan's competitors:
Will anyone ever give Mylan’s ($MYL) blockbuster epinephrine injection, EpiPen, a run for its money?
That’s the question now that another potential competitor is out of the running. The FDA stiff-armed Adamis' ($ADMP) prefilled epinephrine syringe, asking for more data. Regulators want the San Diego-based company to expand a patient usability study and product stress testing studies included in the original application.
The way Evercore ISI analyst Umer Raffat sees it, Adamis’ product wouldn’t have been “a large competitor” for EpiPen, given the difference between its prefilled syringe and Mylan’s more convenient injection pen device. But “Adamis could have added to managed care pressures,” through its stated strategy of acting as a discounted product.
Instead, Mylan is home free--a status it must be getting used to, given the failures that have repeatedly befallen its competitors. Back in November, Sanofi's ($SNY) Auvi-Q hit a wall, when an injector fault triggered a hefty recall. Ultimately, the pharma giant yanked Auvi-Q from the market, and then bailed on its marketing partnership with developer PDL BioPharma ($PDLI), putting the med’s future up in the air. It was EpiPen's first real challenger in years.
More recently, the FDA handed generics giant Teva ($TEVA) a rejection for its generic version of EpiPen, flagging “certain major deficiencies” in its letter to the Israeli pharma. With serious issues to work through, Teva said earlier this year that it expects its product to be "significantly delayed"--meaning it doesn’t expect a rollout before 2017.
The FDA wouldn't have anything to do with the recall, and a request for more information isn't really a particularly effective use of corrupt power. Requests for more data happen all the time, so they're usually turned around pretty quickly. My money's on a perfect storm of chance events, and Mylan's taking the opportunity to capitalize on it.
You do not have a moral or legal right to do absolutely anything you want.
That CEO was basically given a degree because of her father's political ties. https://en.wikipedia.org/wiki/...
Only the State obtains its revenue by coercion. - Murray Rothbard
That list of problems with competitors fails to mention Impax's Adrenaclick, which has been FDA approved and sold in the US market freely since 2010; it's widely available (it's sold at Rite Aid, Walgreens, CVS, Walmart, Target, etc) and much cheaper than EpiPen.
rage, rage against the dying of the light
If the pharmacist can't substitute the Adrenaclick for an EpiPen, then EpiPen isn't generic.
The real "Libtards" are the Libertarians!
With the patent system as it is, where genetic codes and proteins can be patented, and where protection for drug profits is long and deep, there are situations like this that come up that allow unscrupulous companies to hike drug costs ridiculously like these clowns at Mylan.
Yes, many drug research efforts don't pan out. But Epinephrine has been out for a long time. Is anyone seriously going to try to tell me that $50 in 2007 became $304 in 2017? Even given the bogusly low inflation rates that are officially reported, that's insane.
This is profiteering. If the company didn't need to profiteer in 2007, why do they in 2017? No good reason methinks.
How about the definition of sole source is 'no equivalent product available at present'?
And how about you cap the rates at which drug costs can increase unless the providers can show material evidence that their costs have escalated so much?
I don't have $608 to shell out (US) for something I have to replace every 1-2 years. I'm carrying an old epi-pen that's probably not as efficacious now, but it's likely still better than no pen. I just can't afford the money to get a new one (let alone two, since protocol says you hit yourself with the first and about 30 minutes later the second if you haven't reached emergency medical care).
This should be a true generic. There should be equipment whose patents have an earlier mandatory expiry because they exist in the space called 'in the interest of public health'. I'm not suggesting these guys shouldn't have got their money back, but seems to me they are well beyond that point now.
On the other hand, this is exactly why the government or NGOs should be investing in some sorts of medical research in the public interest and making the product patents entirely open and available.
Epinephrine isn't patented. Its the injector. This seems like the kind of thing a Gates Foundation or even the Government could underwrite the development of (and may have already for Atropine and the like in prior days, if we call those syrettes an early version). Make the injector patent available and then it truly is generic because epinephrine is not patented.
The reality is that big Pharma has great lobbyists, political connections, and lawyers and the whole US patent system around biomedical issues defies any sort of common sense or rational thinking.
I hear rumours of alternatives, but I'm not sure they are available beyond the US borders. The Epipen fiasco and the price rise has hit many of us living in other countries too, but I'm not sure any alternatives exist where I live. I am going to look into that now though.
Patents should help protect innovation, but not form monopolies artificially (well, that may be other legislation that does that but that also needs looked at), should not have extensive duration, and should have clauses surrounding medical equipment that if the equipment price rises too quickly or if the provider becomes sole source, that the patent becomes licenseable by other companies for a very modest fee. At some point, the public interest has merit at least as great as profits for corporations.
-- Mal: "Well they tell you: never hit a man with a closed fist. But it is, on occasion, hilarious."