WASHINGTON – Senator Maggie Hassan, a member of the Senate Health, Education, Labor, and Pensions Committee, this week cosponsored bipartisan legislation introduced by Senators Ron Wyden (D-OR) and Chuck Grassley (R-IA) 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.
The bipartisan Right Rebate Act of 2018 would give Medicaid more tools to go after drug manufacturers that they suspect are misclassifying a drug as a generic when it should be a brand name. When a pharmaceutical company misclassifies a drug as a generic drug as part of the Medicaid Drug Rebate Program (MDRP), the company can pay less in rebates into the program and cheat taxpayers.
“As big pharmaceutical companies rip off consumers with skyrocketing prescription drug costs, they’re bilking American taxpayers even more by massively overcharging Medicaid for prescription drugs,” Senator Hassan said. “This is unacceptable, and it’s long past time for Congress to hold Big Pharma accountable for its deceitful tactics. I am pleased that there is bipartisan support to address this issue, and I will push to pass this bill without delay.”
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.