January 19, 2011—Mylan Pharmaceuticals has mailed checks to 340B covered entities in accordance with its October 2009 settlement with the U.S. Justice Department over allegations that it misclassified authorized generic drugs between 2000 and 2004 for purposes of Medicaid rebates and 340B drug discounts. The settlement also included Mylan’s UDL Laboratories subsidiary.
Under the terms of the settlement, 340B providers were to receive a total of $7.3 million.
In Dec. 30, 2010 letters sent to 340B-enrolled providers together with checks, Mylan said it was paying the difference between (a) the total amount that the hospital paid for Mylan and UDL authorized generics between 2000 and 2004 and (b) the lesser amount that the entity would have paid if the products had been classified as innovator drugs under Medicaid.
The company said its calculation of the amount was “submitted to, and accepted by, the federal government.”
The providers were given 180 days to cash the check, after which time, Mylan said, the funds would be subject to transfer to the federal government.
John Farley, an Assistant U.S. Attorney’s Office who handled the Mylan case, said the settlement agreement “envisioned a need for some substantial amount of time” to identify the hospitals and other covered entities involved and to determine the proper amounts of money they were owed.