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 Grassley (R-Iowa) and Ron Wyden (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.
{mosads}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.
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