(Reuters) – Mylan NV has agreed to pay a $30 million fine to settle U.S. Securities and Exchange Commission charges it hid from investors the impact of a federal probe into the drugmaker’s overbilling the government for its EpiPen allergy treatment.
FIlE PHOTO: Logo of Mylan Laboratories, a company primarily engaged in the commercialization of generic drugs is pictured in Merignac near Bordeaux, France, September 19, 2019. REUTERS/Regis Duvignau
The SEC on Friday said Mylan kept investors in the dark when it failed to disclose or set aside money for the two-year probe by the U.S. Department of Justice, prior to announcing a $465 million settlement in October 2016.
That accord resolved claims that Mylan overbilled the government by hundreds of millions of dollars by misclassifying its EpiPen Auto-Injector as a generic drug rather than a brand-name drug.
Authorities said that enabled the company, which has offices in Canonsburg, Pennsylvania, and near London, England, to avoid paying higher rebates to state Medicaid programs.
In a statement, Mylan called the SEC civil settlement “the right course of action,” and said it was committed to the “highest levels of integrity” when communicating with investors and making disclosures in public filings.
The company did not admit or deny wrongdoing in agreeing to settle.
Mylan’s share price fell more than 12% in the roughly five-week period before it announced the Justice Department accord, following reports that members of Congress were accusing the company of misclassifying EpiPen and cheating the government.
The drugmaker had raised EpiPen prices by about 400% from 2010 to 2016, yet paid a fixed rebate to Medicaid during that time. Mylan’s case provided fuel to the still-continuing nationwide debate over soaring drug prices.
“It is critical that public companies accurately disclose material business risks and timely disclose and account for loss contingencies that can materially affect their bottom line,” Antonia Chion, associate director in the SEC enforcement division, said in a statement.
Mylan had in July announced an agreement in principle to settle with the SEC. Its shares were up 9 cents at $19.85 in late morning trading.
Reporting by Jonathan Stempel in New York; Editing by Susan Fenton, Dan Grebler and Tom Brown