EpiPen maker settles with DOJ for $465M over Medicaid allegations

(ABC NEWS) -- The embattled pharmaceutical company Mylan said Friday evening that it had agreed to settle a case with the Department of Justice for $465 million after it was accused of over-billing the government for its EpiPen product.

The company, which has been embroiled in a scandal over the cost of the life-saving injector, noted that the terms of the settlement do not find guilt on the part of the company, its affiliated businesses or staff.

Earlier this week, the Centers for Medicare and Medicaid Services (CMS) sent a letter to Congress informing it that the EpiPen has been misclassified as a generic drug, or "non-innovator" drug, rather than a brand-name drug for nine years.

Manufacturers have to give the federal government a higher rebate on brand-name drugs than they do on generic drugs.

According to the letter to Congress, Mylan was also skimping on another rebate required when price increases of brand-name drugs outpace inflation.

"EpiPen Auto-Injector has been classified with CMS as a non-innovator drug since before Mylan acquired the product in 2007 based on longstanding written guidance from the federal government," Mylan said in announcing the settlement.

The Department of Justice declined to comment.

In recent weeks, the drug company has come under heavy criticism for jacking up the price of the life-saving auto-injector. It recently raised the price of a two-pack to $608. By comparison, two EpiPens in 2007 cost $94.

According to the drug company, the settlement resolves "all potential" claims against it by the federal and state governments over-classification of the drug.

The Associated Press contributed to this report


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