Without calling out any drug companies by name, the U.S. Dept. of Health and Human Services’ Office of Inspector General revealed this week that 10 potentially misclassified drugs may have resulted in $1.3 billion in lost rebates to Medicaid between 2012 and 2016.
The issue of ducking rebates came to the public’s attention earlier this year when Mylan (NSDQ:MYL) reached a $465 million settlement with the Dept. of Justice to resolve claims that the company misclassified its EpiPen auto-injectors as generic rather than branded to avoid paying a higher rebate.
The HHS study compared classifications for drugs in the Medicaid rebate program as reported by drug manufacturers with data from the FDA and found that 98% of the products were “classified appropriately,” according to RAPS.
However, the report revealed that 885 products out of the 30,000 drugs in the Medicaid rebate program were misclassified in 2016 and data were missing for more than 600 other drugs. The report also showed that there was no Medicaid reimbursement for one-third of the potentially misclassified drugs last year.
Although the report didn’t mention companies by name, it did note that just four manufacturers were responsible for more than half of the potential misclassifications.
The Office of Inspector General’s office recommended that the Centers for Medicare and Medicaid Services contact the manufacturers linked to the potentially misclassified products and identify a way to urge companies to update wrongly-classified drugs.
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