Three U.S. Senators wrote to the Department of Justice on Wednesday asking it to investigate Mylan Pharmaceuticals over the EpiPen allergic reaction treatment's classification under the Medicaid drug program and recent price hikes. Mylan classified the EpiPen in the Medicaid Drug Rebate Program as a product with multiple competitors, though the company would have made less profit if it had been considered an "innovator drug" instead, particularly in the case of large price hikes, Sens. Richard Blumenthal (D-Ct.), Chuck Grassley (R-Ia.) and Amy Klobuchar (D-Mn.) said in a letter to the DOJ. The Center for Medicare and Medicaid Services has stated that the product was misclassified, the senators said. "Companies can reap huge profits, at the expense of the states and taxpayers, by misclassifying innovator drugs," the letter said. "In the past, the Department has secured settlements against drug companies under the False Claims Act for such practices - including against Mylan Pharmaceuticals." The senators said that millions of dollars may have been "diverted" from taxpayers as a result of Mylan's alleged misclassification. Mylan shares have taken a hit since its sixfold price increases on the EpiPen attracted consumer and lawmaker outrage. The company's shares were down 1.2% on Wednesday morning. Shares dropped 24.5% in the year to date, compared with a 5.3% rise in the S&P 500 .
Continue Reading Below
Copyright © 2016 MarketWatch, Inc.