Mylan, a Pennsylvania-based company with factories in northwestern Vermont, has agreed to pay $30 million to settle charges that it overcharged Medicaid by hundreds of millions of dollars.
Mylan is a publicly traded company with international headquarters in the Netherlands and 35,000 employees worldwide. In July, the company announced an agreement to merge with the pharmaceutical company Upjohn. It sells its products in more than 165 countries, according to its 2018 annual report.
Mylan in 2017 was ordered to pay Vermont about $1 million as part of a $465 million national settlement to resolve claims under Vermont’s False Claims Act. On Sept. 27, the Securities and Exchange Commission announced that Mylan had agreed to pay $30 million to settle charges that it overcharged Medicaid by hundreds of millions of dollars for its EpiPen, its most profitable product. The EpiPen is a device that patients can use to inject themselves with medication when they are experiencing a severe allergic reaction.
The $30 million is in addition to the earlier settlement.
Mylan was criticized by lawmakers, health care advocates, and patients in 2016 after it increased the price of a two-pack of the anaphylaxis drug — its signature product, the EpiPen – from $100 to over $600, with only one other competitive product on the market.
In its statement Sept. 27, the SEC said Mylan classified EpiPen as a generic drug under the Medicaid Drug Rebate Program, enabling it to pay lower rebates to the government than if the device were classified as a branded drug.
The Centers for Medicare and Medicaid Services, or CMS, notified Mylan in October 2014 that the device was misclassified, the SEC said in a statement. The Department of Justice investigated for two years. The SEC said Mylan made false and misleading public filings.
“Investors were kept in the dark about Mylan’s EpiPen misclassification and the potential loss Mylan faced as a result of the pending investigation into the misclassification,” said Antonia Chion, associate director in the SEC’s Division of Enforcement, in the SEC statement. “It is critical that public companies accurately disclose material business risks and timely disclose and account for loss contingencies that can materially affect their bottom line.”
In its response, Mylan said it neither admitted nor denied the SEC’s allegations.
“Mylan believes at this time, taking all other matters into consideration, that this settlement is the right course of action for the Company,” Mylan said in its prepared statement. “The Company continues to be committed to the highest levels of integrity with respect to all aspects of its business operations, including its public filing disclosures and communications with investors.”
A spokeswoman for Mylan in Pennsylvania referred questions to Mylan’s official statement on the matter, and declined to say how many people work in Mylan’s Vermont facilities, which are located in St. Albans and Swanton, or what is made there.
Mylan has received millions of dollars in state support in recent years to promote its growth in St. Albans.
