In the latest fallout from the EpiPen pricing scandal, Mylan (MYL) agreed to pay $30 million to settle charges by the Securities and Exchange Commission for failing to disclose to investors a Department of Justice probe into allegations of overcharging Medicaid for the allergy-relief device.
The settlement, which the company had indicated last July was being finalized, comes two years after the company paid $465 million for shortchanging the government health care program. At the time, the Justice Department had been investigating Mylan for knowingly classifying EpiPen as a generic product for nearly a decade in order to avoid paying the appropriate rebates owed to Medicaid.
Under the Medicaid rebate program, drug makers that want their medicines covered must pay a rebate to federal and state governments, but the rebate rate is 23.1% for brand drugs versus 13 percent for generics. When applying for a rebate, a company must indicate whether its drug is brand or generic. But a government analysis found Mylan may have overcharged taxpayers up to $1.27 billion over a 10-year period, prompting a new law that requires drug makers to properly classify their products.
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