Big Pharma Sanofi-Aventis was awarded $38.7 million Thursday as its share of a $465 million False Claims Act settlement by Mylan for knowingly misclassifying EpiPen as a generic drug to avoid paying rebates owed to Medicaid.
Mylan Inc. and Mylan Specialty L.P. settled the allegations. They’re both wholly owned subsidiaries of Mylan N.V., which is headquartered in Canonsburg, Pennsylvania.
The $465 million settlement resolved a lawsuit filed under the whistleblower provisions of the False Claims Act.
The FCA permits private parties to sue on behalf of the government and share in any recovery.
“The whistleblower in this case was the pharmaceutical manufacturer, Sanofi-Aventis US LLC. It will receive approximately $38.7 million as its share of the federal recovery,” the DOJ said.
Paris-based Sanofi-Aventis used its U.S. unit to sue Mylan.
The federal government can intervene in False Claims Act suits brought by private parties.
“The government’s intervention in this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act,” the DOJ said Thursday.
The settlement agreement (pdf) resolved allegations that Mylan wrongly reported EpiPen as a generic drug to Medicaid despite the absence of any therapeutically equivalent drugs. By doing that, Mylan was able to demand “massive price increases in the private market while avoiding its corresponding rebate obligations to Medicaid,” the DOJ said.
Between 2010 and 2016, Mylan increased the price of the EpiPen by 400 percent. But it paid only a fixed 13 percent rebate to Medicaid during the same period.
Mylan knew its drug was not a generic, according to the DOJ.
Acting U.S. Attorney William Weinreb said: “Mylan misclassified its brand name drug, EpiPen, to profit at the expense of the Medicaid program. We will continue to protect the integrity of Medicaid and ensure a level playing field for pharmaceutical companies.”
As part of the settlement, Mylan entered into a corporate integrity agreement with the federal government. The integrity agreement requires an annual independent review of Mylan’s practices in the Medicaid drug rebate program.
The DOJ said Thursday the settlement resolved allegations only and “there has been no determination of liability.”
The case was United States ex rel. Sanofi-Aventis US LLC v. Mylan Inc., et al., No. 16-CV-11572 (D. Mass.).
Richard L. Cassin is the publisher and editor of the FCPA Blog.