EpiPen maker Mylan Inc. finalized a $465 million government settlement after the U.S. Justice Department claimed Mylan overcharged the government for its EpiPen emergency allergy treatment.
The settlement resolved the claims that Mylan avoided higher rebates to state Medicaid programs by classifying EpiPen as a generic product, according to Reuters.
In the settlement, Mylan did not confirm the allegations. The company agreed to reclassify EpiPen and pay the rebate applicable to its new classification as of April 1, 2017.
"Taxpayers rightly expect companies like Mylan that receive payments from taxpayer-funded programs to scrupulously follow the rules," Acting U.S. Attorney William Weinreb said in a statement.
Mylan came under fire last year after the company raised the price of a pair of EpiPens to $600, from $100 in 2008.
Sanofi SA, which formerly marketed a rival product called Auvi-Q, filed the first lawsuit against the Mylan in 2016, claiming that they were overcharging the government.
Sanofi will receive nearly $38.8 million as a reward from the government, according to Reuters.
Attorney General Eric T. Schneiderman issued a statement about the settlement.
"For nearly seven years, Mylan prioritized its bottom line - and shortchanged the Medicaid program and taxpayers," he said in a statement. "Pharmaceutical companies should be warned: efforts to shortchange Medicaid will not be tolerated, and we'll ensure that these companies are held accountable."
Lawmakers on both sides have criticized the settlement.
“This settlement amount is completely insufficient – a feeble fraction of the $1.27 billion Mylan swindled out of Connecticut and American taxpayers," Democratic Sen. Richard Blumenthal said in a statement. "Quite simply, the Department of Justice is letting this deceptive pharmaceutical behemoth off the hook."
Republican Sen. Chuck Grassley also had choice words about the agreement.
“The settlement is a disappointment. The agencies that are supposed to look out for taxpayers should not be pulling their punches," Grassley said in a statement. "A company got away with overcharging the taxpayers for a long time. If there’s any good news, it’s that EpiPen will be classified the right way going forward."