WASHINGTON (Legal Newsline) — The U.S. Department of Justice announced Aug. 17 that pharmaceutical companies Mylan Inc. and Mylan Specialty L.P. will pay $465 million after allegations of violating the False Claims Act.

“This settlement demonstrates the Department of Justice’s unwavering commitment to hold pharmaceutical companies accountable for schemes to overbill Medicaid, a taxpayer-funded program whose purpose is to help the poor and disabled,” said acting attorney general General Chad A. Readler of the Department of Justice’s Civil Division. “Drug manufacturers must abide by their legal obligations to pay appropriate rebates to state Medicaid programs.”

According to allegations, Mylan knowingly misclassified its EpiPen product as a generic drug. By doing so, Mylan could avoid paying rebates primarily owed to Medicaid. The Medicaid Drug Rebate Program was created to protect Medicaid from price gouging by manufacturers of drugs only available from a single source.

“Mylan misclassified its brand name drug, EpiPen, to profit at the expense of the Medicaid program,” said acting U.S. attorney William D. Weinreb. “Taxpayers rightly expect companies like Mylan, that receive payments from taxpayer-funded programs, to scrupulously follow the rules. We will continue to protect the integrity of Medicaid and ensure a level playing field for pharmaceutical companies.”

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