EpiPen maker Mylan, U.S. officials stiff-arm senator's call to testify on DOJ settlement

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U.S. Senator Charles Grassley has run into trouble getting officials from Mylan and the U.S. government to testify about a settlement between the Department of Justice and the pharma company.

U.S. lawmakers are still trying to hold Mylan accountable for its controversial EpiPen price hikes. But the company now flatly refuses to testify at a committee hearing convened by Sen. Charles Grassley, who's questioning Mylan's ultraquick Medicaid-rebate settlement with the Justice Department.

Grassley has asked Mylan, plus officials with the Justice Department and Centers for Medicare and Medicaid Services, to testify at a hearing next week on the company’s $465 million settlement involving Medicaid overpayments for EpiPen. So far, though, they've all declined to attend.

Mylan announced the settlement—in which it admits no responsibility—back in October after misclassifying EpiPen on the public program for years. The deal came just days after CMS Acting Administrator Andy Slavitt called Mylan on its misclassification, which allowed the company to underpay Medicaid rebates. That could be record time for a DOJ settlement in the pharma industry.

Since then, lawmakers and officials have characterized the deal as a “sweetheart” agreement and “a shadow of what it should be." Some analysts calculated potential liabilities several hundred million higher, and the company disclosed in a securities filing that the Securities and Exchange Commission was also investigating the underpaid rebates.

In its letter to the senator, Mylan said that because the hearing is on a “pending matter” and that government officials aren’t attending, the company “respectfully declines” the invitation.

Grassley hit back, saying the Obama Administration officials are “dodging accountability for an expensive problem” and Mylan is following that “bad example.”

“One way or another, I intend to get answers for patients and taxpayers,” Grassley said in a statement.

In a separate move on Monday, Grassley said he’s seeking to learn whether Mylan misled investors in announcing that DOJ settlement before it had been finalized. In a letter to SEC Chair Mary Jo White, Grassley urged the agency to probe whether Mylan’s press release about the settlement was “materially misleading.”

So far, the Justice Department hasn’t confirmed the terms of the deal, according to Grassley, and it’s been five weeks since Mylan said it agreed to the terms. 

“Given the dissonance between the press release, the 8-K filing, and the fact that no settlement agreement has been executed, Mylan should explain why it released such a strongly worded press release knowing that a finalized settlement did not yet exist and given the apparent SEC investigation,” Grassley wrote in a letter.

In third-quarter results released earlier this month, Mylan said the payment set aside for the settlement contributed to the company's $119.8 million net loss in the third quarter, compared with last year’s profit of $428.6 million on the period.

The newest scrutiny from Grassley comes amid a lengthy EpiPen pricing scandal for the company that first started in August. Following the settlement announcement, law firm Bernstein Liebhard announced a shareholder suit against Mylan.