The epinephrine autoinjector EpiPen received considerable scrutiny in the past year because Mylan, its manufacturer, increased its list price to $609 even though the only ingredient, epinephrine, was discovered over 100 years ago (the delivery system is patented). Mylan recently announced a $465 million settlement with the Department of Justice (DOJ) to resolve a fraud investigation,1 alleging that Mylan misclassified EpiPen as a generic drug for the Medicaid Drug Rebate Program2 to grant the government a lower rebate per unit sold. For brand-name drugs, the manufacturer pays a higher base rebate amount and an additional rebate connected to price increases above inflation. Since the economic impact of the misclassification of EpiPen by Mylan remains controversial,3 we used publicly available data to estimate the amount of money Medicaid lost due to Mylan’s classification of EpiPen as a generic product, to help policymakers evaluate the value of the proposed settlement.
Luo J, Kesselheim AS, Avorn J. Medicaid Expenditures and Estimated Rebates for Epinephrine Autoinjectors, 2012 to 2016. JAMA Intern Med. 2017;177(5):734-736. doi:10.1001/jamainternmed.2017.0257