Senator Grassley Speaks Up About EpiPen Pricing
According to Senator Chuck Grassley, the U.S. government knew about Mylan NV‘s (NASDAQ:MYL) exorbitant pricing of the “EpiPen” as early as 2009.
The famous allergy shots, which are essential products for anyone with severe food allergies, are included in the Medicaid program. However, they were misclassified in the pricing program, leaving taxpayers with an artificially inflated bill, alleges Grassley.
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The Iowan Republican Senator sent a letter to the Department of Health and Human Services to ask for records related to the misclassification. It was addressed to the department’s inspector general and basically asked if the Center for Medicare and Medicaid overpaid for EpiPens.
“It appears the EpiPen was misclassified for years, and CMS was notified of the problem,” Grassley said in a statement Tuesday. “If no one did anything about the misclassification, why not? This could mean hundreds of millions of dollars in taxpayer over-payments occurred without justification.”
While the department failed to answer his queries, it had issued a statement last month which partially explains what happened. Apparently, the Department of Health and Human Services notified Mylan of the EpiPen price inconsistency after discovering it, but the particular date of notification was not included in the statement.
The department also settled with Mylan over the alleged transgressions, striking a deal which cost the company $465.0 million in fines. (Source: “U.S. Government Was Informed of EpiPen Overcharging in 2009,” Bloomberg, November 8, 2016.)
Extreme food allergies affect as many as 15 million Americans, some of whom are children. As a result, there needs to be an EpiPen in every U.S. school, but they also need upgrading once a year. These factors have led to a very profitable monopoly for Mylan.
It is no surprise then, that prices for the EpiPen have exploded since 2008, rising more than 400% from $100 to $500. These price hikes came without any significant upgrades to the product, suggesting to many observers that Mylan was simply price gouging its customers.
Mylan owns 90% of the U.S. market and draws in $1.3 billion of annual revenue from EpiPen sales, but that doesn’t negate the harmful effects EpiPens can have on customers.
Even with the $100 vouchers that Mylan offers some of its customers, those at the lower end of the socioeconomic ladder struggle to pay for the EpiPens. But at the end of the day, they are forced to buy EpiPens because, in some cases, it is literally a matter of life and death.
