August 18, 2017—Hospitals and other healthcare providers in the 340B drug discount program will receive $19.3 million plus interest from drug manufacturer Mylan for overcharges due to Mylan’s misclassification of its epinephrine auto-injector EpiPen as a generic rather than brand-name product. The 340B payment is part of Mylan’s $465 million settlement of a False Claims Act suit brought by the U.S. Justice Department and competing drug manufacturer Sanofi.
The settlement amount is among the largest a drug manufacturer has agreed to pay 340B providers for overcharges, based on a review of publicly available information. GlaxoSmithKline agreed in 2012 to repay 340B providers $20.2 million for overcharges covering the period 1994 through 2003 as part of a $3 billion global health care fraud settlement with DOJ.
In a related development, less than an hour after the Mylan settlement was announced yesterday, the Trump administration proposed to again delay – to July 1, 2018 – the effective date of a long overdue regulation to fine drug manufacturers for 340B overcharges. The regulation had been due to take effect Oct. 1.
“Government watchdog reports have shown that Mylan isn’t alone in overcharging 340B hospitals and other providers for prescription drugs,” said Ted Slafsky, president and chief executive officer of the hospital group 340B Health. “Those overcharges diminish hospitals’ capacity to serve their low-income and rural patients. The Trump administration should let the regulation take effect. Civil monetary penalties would be a strong deterrent to prevent overcharges.”