The EpiPen pricing scandal continues, as questions arise regarding possible Medicaid fraud

Wednesday, September 28, 2016 by: David Gutierrez, staff writer
Tags: EpiPen, price gouging, Medicaid fraud

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(NaturalNews) The scope of the EpiPen pricing scandal continues to widen, with new questions arising regarding antitrust violations, Medicaid fraud and collusion with state education boards.

EpiPen is an epinephrine injection device that has been marketed by drug company Mylan since 2007, to be used in the case of life-threatening anaphylactic allergic reactions. Since acquiring the rights to EpiPen, Mylan has jacked up the price of the drug by more than 500 percent, with a corresponding explosion in company profits and CEO salaries.

At the same time, families have increasingly found themselves unable to afford the life-saving drug.

Generic or brand-name?

The Mylan EpiPen scandal has garnered nationwide attention. It has been widely interpreted as an iconic case of the type of price gouging regularly engaged in by Big Pharma.

While most discourse has centered on the scandal's ethical components, it is the legal aspects that have recently concerned government officials. On September 20, the attorney general of West Virginia confirmed that the state is investigating Mylan for antitrust violations and Medicaid fraud. The state appealed to the courts after Mylan failed to respond to a subpoena by the deadline.

Mylan is based in West Virginia, which is also the home of company CEO Heather Bresch. Bresch's father, Joe Manchin, is a former West Virginia governor, and now represents the state in the U.S. Senate.

The attorney general believes that Mylan underpaid the Bureau for Medical Services (BMS) by having EpiPen classified as a "non-innovator" drug, a category typically reserved for generic products. But EpiPen is not a generic product, hence Mylan's ability to drive the price up to astronomical levels – all while paying a low, generic rebate price.

West Virginia is also investigating Mylan for antitrust violations for suing competing company Teva Pharmaceuticals in 2012 to prevent it from bringing a generic version of EpiPen to market.

Mylan controls 90 percent of the country's epinephrine auto-injector market.

CEO's mother abused power

On September 21, Bresch appeared in Washington, D.C., before the House Oversight and Government Reform Committee to answer questions about EpiPen's pricing. The hearing was marked by Bresch being taken to task for flying on a private jet while her company price-gouges children with deadly allergies, as well as her failure to answer even the most basic questions about the company's EpiPen expenses or profits. Bresch had failed to bring the information requested by Congress, and did not know it off the top of her head.

FDA deputy director Doug Throckmorton also drew Congressional ire for refusing to answer how many applications the agency is currently considering for EpiPen competitors, claiming he was legally barred from giving out that information in a public forum.

In a particularly bizarre twist, Bresch kept insisting that Mylan has saved the country $180 billion in medical expenses, but without providing any details to back up this number.

Many of the questions centered on Mylan's lobbying efforts to get Congress and state governments to incentivize schools to stock EpiPens. Members of Congress noted that Bresch's mother, Gayle Manchin, served as president of the National Association of State Boards of Education (NASBE) at the same time that Mylan launched its EpiPen4Schools plan, with attendant lobbying efforts – and eventual action by Congress.

Rep. Tammy Duckworth expressed anger that schools participating in the program were unaware that the president of the institution lobbying them to join was the mother of Mylan's CEO.

Even Rep. Mick Mulvaney, who expressed his distaste for government intervention in a private company's pricing decisions, told Bresch that Mylan had only itself to blame for facing Congressional inquiry.

"If you want to come to Washington, if you want to come to the state capitol and lobby us to make us buy your stuff, this is what you get," he said. "You get a level of scrutiny and a level of treatment that would ordinarily curl my hair, but you asked for it!"

Bresch and Throckmorton have 10 days to provide the information that they failed to supply at the hearing.

Sources for this article include:

BusinessInsider.com

BusinessInsider.com

Consumerist.com

Science.NaturalNews.com