WASHINGTON – Sen. Chuck Grassley of Iowa, chairman of the Senate Judiciary Committee, today released the following statement on a report released by the Health and Human Services (HHS) Office of Inspector General (OIG) that showed 885 drugs were potentially misclassified under the Center for Medicare and Medicaid Services’ (CMS) Medicaid Drug Rebate Program, resulting in billions in lost taxpayer dollars. In an earlier report requested by Grassley, HHS found that Mylan’s misclassification of EpiPen under the program cost CMS $1.3 billion over 10 years. Today’s OIG report analyzed 2012-2016, suggesting that a 10-year period of analysis would reveal an even bigger loss to taxpayers.
“It appears that Mylan’s misclassification of EpiPen under the Medicaid Drug Rebate Program was just the tip of the iceberg. The top 10 potentially misclassified drugs cost Medicaid $1.3 billion from 2012-2016 alone. The report’s findings that 885 drugs were potentially misclassified likely represents many billions more in lost taxpayer dollars. The report indicates that 97 percent of drugs were classified correctly, but three percent of hundreds of billions of dollars in rebates is still billions of lost taxpayer dollars. That’s not chump change, and it can’t be swept under the rug. While I’m glad CMS has indicated that it will follow HHS OIG’s recommendations, it should also commit to aggressively pursuing corrective action to recoup the billions of taxpayer dollars from all 885 potentially misclassified drugs in consultation with the HHS OIG as appropriate. I appreciate the HHS OIG’s work on this issue and I expect them to keep their eye on the ball. I plan on looking into ways there can be better enforcement to make sure this doesn’t happen again.”
For months, Grassley has pressed for the accurate classification of prescription drugs under the Medicaid Drug Rebate Program. Grassley’s work was prompted by letters from Iowans about increasing EpiPen costs. Grassley previously expressed disappointment regarding the settlement between the Justice Department and EpiPen-maker Mylan over its misclassification, saying the amount shortchanged taxpayers. Grassley also sought accurate overpayment amounts for Dilaudid and Prilosec, two other popular drugs that reportedly were misclassified.
Grassley’s letter to then-President-elect Trump urging appropriate classification under the Medicaid Drug Rebate Program is available here. Grassley’s January letter to the outgoing administration on the issue is available here. His Oct. 3 letter to the prior administration on the EpiPen misclassification is available here.
-30-
