After EpiPen Maker Overcharged Taxpayers for Hundreds of Millions of Dollars, Bipartisan Senators Release Legislation to Clamp Down on Misclassification

Washington, D.C. – Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and senior Finance Committee member Chuck Grassley, R-Iowa, today introduced a bill that would fix an issue in Medicaid that has allowed pharmaceutical manufacturers to misclassify their drugs and overcharge taxpayers by hundreds of millions of dollars.

“While families struggle to afford medicines like EpiPen, drug makers are busy manipulating the system to squeeze taxpayers even more,” Wyden said. “This bipartisan bill will crack down on Big Pharma’s games and help prevent them from taking advantage of Medicaid, a program meant to protect the most vulnerable. I am hopeful that this legislation will become law by the end of the year and set the tone for the important work that lies ahead to lower prescription drug prices for families across the country.” 

“Misclassification of prescription drugs hurts millions of Americans whose lives depend on those medications, such as EpiPen, but can’t afford them due to unnecessarily exorbitant pricing,” Grassley said. “This legislation is a significant step forward to fixing the problems in our health care system that have allowed pharmaceutical manufacturers to price gouge taxpayers and consumers for too long.”

The bill, called the “Right Rebate Act,” would give Medicaid more tools to go after drug manufacturers when they are suspected of misclassifying a drug as a generic when it should be a brand name.

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.


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