House passes bill to keep drug companies from overcharging Medicaid

The House approved a proposal Tuesday cracking down on the tactics drug companies use to charge Medicaid.

The bipartisan bill, from Sens. Chuck GrassleyCharles (Chuck) Ernest GrassleyOvernight Health Care: Nevada union won't endorse before caucuses after 'Medicare for All' scrap | McConnell tees up votes on two abortion bills | CDC confirms 15th US coronavirus case Mnuchin defends Treasury regulations on GOP tax law Wyden, Mnuchin clash over Trump tax returns, Hunter Biden probe MORE (R-Iowa) and Ron WydenRonald (Ron) Lee WydenSenate Dems blast Barr for 'clear violation' of duty in Stone case, urge him to resign Overnight Health Care: Nevada union won't endorse before caucuses after 'Medicare for All' scrap | McConnell tees up votes on two abortion bills | CDC confirms 15th US coronavirus case Harris, Castro introduce resolution condemning Trump aide Stephen Miller MORE (D-Ore.), comes after the Department of Health and Human Services last year accused Mylan, the maker of EpiPen, of overcharging the Medicaid program by as much as $1.27 billion over ten years by misclassifying the drug as a generic.

The Grassley and Wyden bill would give the Department of Health and Human Services new authority to reclassify a drug and recoup rebates when a manufacturer deliberately misclassifies a drug in order to pay lower rebates. 

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The federal government does not currently have the authority to do that. 

Myland paid a $465 million settlement in 2017 for misclassifying the EpiPen.

When introducing the bill last week, Wyden and Grassley specifically cited Mylan and the EpiPen. 

“Misclassifying brand-name drugs as generics under the Medicaid Drug Rebate Program is little more than a dishonest way for drug manufacturers and distributors to game the system and cheat American taxpayers out of their hard-earned money," Grassley said in a statement Tuesday. 

The bill was included as a payfor in the ACE Kids Act, a bipartisan bill aimed at improving care for children with complex medical needs. The CBO estimates that bill will cost $63 million over 10 years, with the rebates bill saving the government $52 million in the same time frame.

Grassley will be the Senate Finance Committee's chairman next year, giving him a larger platform to go after drug companies, while Wyden will continue to be the ranking member.