Seema Verma, the nominee to head the Centers for Medicare & Medicaid, said at her confirmation hearing that she would like to review the way pharmaceutical companies classify products as generic or branded, citing the case of Mylan‘s (NSDQ:MYL) EpiPen emergency allergy device.
Mylan faced criticism this year for classifying EpiPen as a generic and paying smaller rebates to Medicaid than if the device was listed as branded.
CMS said that the company has overcharged Medicaid for its EpiPen auto-injector for years, despite being warned that it misclassified the device.
“I think what happened with … the EpiPen issue is very disturbing,” Verma told the Senate finance committee, according to Reuters. “The idea that perhaps Medicaid programs, which are struggling to pay for those programs, that they could have potentially received rebates is disturbing to me.”
“I would like to review the processes in place there, in terms of the classifications, in terms of brand and generic, to ensure that type of thing doesn’t happen again,” she added.
Verma did not say whether she believes the U.S. government should negotiate with pharmaceutical companies over drug prices, the news outlet reported.
“I don’t think that’s a simple yes or no answer,” Verma said. “The goal is to make sure that we’re getting affordable prices for our seniors.”
Mylan has been under fire since August when reports revealed it hiked the price of its EpiPen device 500% since it acquired the auto-injector in 2007. In response to widespread criticism from politicians and lawmakers, Mylan said in August that it would launch a discounted generic version of the device and expand its patient assistance program.
In mid-December, the company announced that its generic EpiPen will sell for $300 per two-pack, which is a 50% discount compared to the price of the brand name device.
Las month, Mylan said that it is undergoing an antitrust probe by the Federal Trade Commission into the company’s commercial practices regarding its EpiPen device.
The Canonsburg, Pa.-based company reportedly responded to the allegations that it improperly fought off competition, saying “any suggestion that Mylan took any inappropriate or unlawful actions to prevent generic competition is without merit.”
Materials from Reuters were used in this report.