January 24,2019

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Wyden, Grassley Release Bill to Crack Down on Big Pharma Games

After EpiPen Maker Overcharged Taxpayers for Hundreds of Millions of Dollars, Finance Leaders Offer Bipartisan Bill to Close the Door on Misclassification

Washington, D.C. – Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and Senate Finance Committee Chairman Chuck Grassley, R-Iowa, today introduced a bill to prevent drug makers from manipulating Medicaid to take more profit from misclassified drugs. 

“Every day, working families struggle to afford medicines like EpiPen while drug manufacturers work the system to profiteer off taxpayers,” Wyden said. “This bipartisan legislation will crack down on drug makers that deliberately try and rip off Medicaid and taxpayers by misclassifying their drugs. It marks an important first step in the work that lies ahead to lower prescription drug prices for families and hold drug makers accountable.”

“Drug manufacturers that make millions from government programs like Medicaid owe it to taxpayers to treat their hard-earned dollars with respect,” Grassley said. “Gaming the system by intentionally misclassifying drugs to reduce rebate obligations is nothing short of stealing taxpayer dollars and it’s inexcusable. This bipartisan bill fixes that problem and sends a clear signal to drugmakers that cheating taxpayers doesn’t pay and won’t be tolerated.” 

The bill, called the “Right Rebate Act,” will give the Department of Health and Human Services the authority to reclassify a drug, recoup rebates, and go after drug manufacturers when they are suspected of purposely misclassifying branded products as generics. The bill was included in the IMPROVE Act last year, which cleared the House of Representatives 400-11.

In 2016, EpiPen maker Mylan was found to have drastically increased prices since it began selling the emergency allergy treatment in 2007 – a total of 17 price increases leading to a $608.61 price for a pack of two. It became apparent that in addition to these exorbitant price increases, Mylan was also overcharging Medicaid by millions of dollars by classifying EpiPen as a generic drug when it was in fact a brand name drug. Mylan settled with the federal government for $465 million to address this issue.

A one page summary of the bill can be found here. A section-by-section summary can be found here.

The full legislative text of the bill can be found here.