A pushback by investors over executive pay at Mylan



HHS's Office of Inspector General estimates Mylan may have overcharged Medicaid $1.27 billion for EpiPens over the last decade by improperly classifying the devices as generic products under CMS' rebate program, reports STAT.

Senator Chuck Grassley, R-Iowa, the chairman of the Judiciary Committee, said that she received an estimate from the Department of Health and Human Services Office of Inspector General that the taxpayers may have overpaid for EpiPen by as much as $1.27 billion from 2006 through 2016.

Put off by what they see as exorbitant pay for Mylan executives, some big pension funds are attempting to block the reelection of a number of board members, including Chairman and former Chief Executive Robert Coury, who received $100 million a year ago. Chuck Grassley, claiming that the drugmaker may have conned taxpayers out of more than $1 billion by misclassifying EpiPen as a generic, rather than a brand-name drug.

Grassley followed the release of Wednesday's report with a statement, saying, "As part of bringing down drug costs, we have to make sure companies that take part in federal health care programs aren't gaming the system". Taxpayers ended up with a bigger bill.

That amount is far more than the $465 million that EpiPen's owner, the big drugmaker Mylan, said that it agreed to pay the federal government previous year to settle claims that it overcharged the nation's Medicaid system for the devices.

CEO Heather Bresch was forced to testify before Congress to defend a relentless series of price hikes that raised the list price on a two-pack of EpiPens by 400% over seven years to $609.

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Nina Devlin, a Mylan spokeswoman, said in an email that "we continue to work with the government to finalise the settlement as soon as possible". CVS is now selling a rival, generic version of EpiPen at about a sixth of the price of the brand-name version of the life-saving allergy treatment. In contrast, name brand drugs have to reimburse 23.1 percent.

Their windfalls came despite the company being roasted by the United States government for increasing the price of its EpiPens - which are used to treat potentially fatal allergic reactions - by more than 500 per cent since 2007.

"Mylan did not report Best Price information to CMS for Epipen", the OIG reported.

Amid that controversy, a number of elected officials questioned whether Medicaid had been receiving the correct amount of rebates from Mylan for EpiPen sales within that program.

The funds control around 4.3 million Mylan shares.

Mylan would have also owed an inflation-related rebate for EpiPen if the drug was classified as branded.

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