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Monday, September 12, 2016

Grassley Seeks to Determine Whether Iowa Taxpayers Overpaid for EpiPens Under Medicaid

Senator Grassley calls for Mylan Response on EpiPen
WASHINGTON, September 12, 2016 – Sen. Chuck Grassley has asked the Iowa attorney general to review whether Iowa taxpayers have overpaid for EpiPens under Medicaid.  

It appears Minnesota taxpayers may have overpaid for EpiPens by more than $4 million in a single year because the product might have been misclassified under a rebate program. Grassley is concerned about whether Iowans also overpaid. 

“If Minnesota has been potentially overcharged to the tune of $4 million, so too could Iowa. And if that is the case, the people of Iowa ought to be reimbursed for the overcharge,” Grassley wrote to Iowa Attorney General Tom Miller.  “It goes without question that the people of Iowa work very hard for their money, which is why I have committed to intense oversight of not just the federal government and its spending habits, but oversight of private companies that profit handsomely off federal and state government programs supported by Iowans’ taxpayer dollars.  …

“Iowans are rightly concerned about the high price of EpiPens. Accordingly, I urge you to review whether the state of Iowa and the people of Iowa have been overcharged by the potential misclassification of Mylan’s EpiPen as a generic drug. Please advise on what steps you are taking, or intend to take, on whether Iowa was overcharged, and if so, by how much.”

Grassley said it also would be helpful to know how much the state of Iowa has spent on EpiPens in the past five years.  Grassley said he would appreciate a response by Sept. 20.

Grassley said that under the Medicaid drug rebate program, branded drugs and authorized generic drugs carry a higher rebate than generic drugs.  If Mylan’s EpiPen was classified as a generic drug, the company would have paid the lower rebate, perhaps incorrectly, causing states to pay more. Grassley is interested in whether an incorrect classification involving EpiPens has bearing for other companies and drugs in the rebate program and if so, whether adequate oversight of the program exists.

“This information will be helpful as Congress works to understand whether the generic drug classification system is working as intended and whether drug companies and the Centers for Medicare and Medicaid Services are fulfilling their responsibilities under the program,” Grassley wrote.

Grassley wrote that the Minnesota attorney general opened an inquiry into the EpiPen pricing and the effects on the people of Minnesota, including through the school system. 

Grassley began his inquiry on the high cost of EpiPens on Aug. 22, when he wrote to the manufacturer of the EpiPen, used for emergency treatment for life-threatening allergic reactions, seeking an explanation of the steep price increase in the product in recent years.  Grassley’s letter came after Iowans expressed concern to him about the prices.  

Grassley then led a letter from five senators to the Food and Drug Administration, seeking details on whether alternatives to the EpiPen are in the works.  He also was one of three senators who asked the Centers for Medicare and Medicaid Services regarding the effects of the price increases on public health care programs.  

The company has since announced expanded patient assistance programs and a generic version of the product.
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