Drug company Mylan disclosed in a regulatory filing this week that it has reached a $30 million agreement-in-principle to resolve the Securities and Exchange Commission’s investigation alleging securities violations for disclosures surrounding its popular EpiPen.
In a July 29 filing, Mylan said it first received document requests in October 2016 from the SEC’s Division of Enforcement “seeking communications with the Centers for Medicare and Medicaid Services and documents concerning Mylan products sold and related to the Medicaid Drug Rebate Program (MDRP), and any related complaint.” Mylan then received a follow-up letter from the SEC in November 2016 seeking information on, and public disclosures regarding, its previously disclosed settlement with the Department of Justice and its classification of the EpiPen under the MDRP.
In August 2017, Mylan and Mylan Specialty reached a $465 million settlement with the Department of Justice to resolve claims that they violated the False Claims Act by knowingly misclassifying EpiPen as a generic drug to avoid paying rebates owed primarily to Medicaid. According to the Department of Justice, between 2010 and 2016, Mylan increased the price of the EpiPen by approximately 400 percent, and yet paid only a fixed 13 percent rebate to Medicaid during the same period.
“Following recent discussions, the company reached an agreement-in-principle that it violated Sections 17(a)(2) and Sections 17(a)(3) of the Securities Act of 1933 and the reporting, books and records, and internal controls provisions of the Securities and Exchange Act of 1934,” Mylan said in this week’s filing.
Under the settlement, Mylan said it would “neither admit nor deny the allegations.” The agreement-in-principle is still subject to approval by the SEC.
Mylan further announced the retirement of CEO Heather Bresch, who in 2016 was lambasted by Congress during a four-hour Congressional hearing regarding the EpiPen’s steep price increases.
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