Government still has 'no settlement' with Mylan, CMS administrator says

Andy Slavitt
Andrew Slavitt, CMS acting administrator, said in a letter that "there is no settlement with any potential party" over alleged Medicaid misclassification of EpiPen.

Last fall, Mylan announced it had reached a swift settlement with the U.S. Department of Justice over alleged Medicaid misclassifications on the big-selling EpiPen. But now, a top U.S. health official says there’s no such deal, adding yet another twist to the company’s prolonged EpiPen episode.

CMS Acting Administrator Andrew Slavitt wrote in a letter (PDF) released Thursday that “there is no settlement with any potential party.” That’s contrary to Mylan’s statement back in October that it “agreed to the terms” of a $465 million settlement.

A Mylan spokesperson said Friday that the company has no comment beyond its October press release, but she added that the release "said we were working to finalize the settlement.”

As announced by the drugmaker, the deal would see Mylan admit no wrongdoing and put to bed legal liability on alleged EpiPen misclassification on Medicaid. For years, Mylan was said to classify EpiPen as a “non-innovator multiple source” drug associated with smaller rebates than “innovator” drugs. Mylan agreed to the deal terms just two weeks into the Medicaid classification scrutiny.

Mylan’s shares quickly shot up following the announcement on what investors saw as a positive outcome from the scrutiny, but since then, multiple public officials have asked the government to dig deeper. Sen. Richard Blumenthal, D-Conn., for one, said the deal was “unacceptable” and “a shadow of what it should be." He asked the U.S. Attorney General to reject the deal.

In November, with the deal still not wrapped up, Mylan execs said the company was “working to finalize” the arrangement as the payment set aside contributed to the company's $119.8 million net loss in the third quarter.

The settlement issue is just one that’s cropped up for Mylan since last fall, when lawmakers first started calling for investigations into the company’s EpiPen pricing practices. Now, as competitors seek to move in on the market, one analyst recently predicted Mylan’s EpiPen revenue will fall to $300 million in 2018 from $1.1 billion in 2016.

One potential competitor, privately held Kaléo Pharma of Richmond, Virginia, on Thursday announced plans to bring a rival product to market starting next month for which most patients would pay nothing.