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Mylan to pay $30M to settle SEC claim of EpiPen disclosure failure

Mylan NV has agreed to pay $30 million to the U.S. Securities and Exchange Commission to settle a complaint alleging the company failed to inform investors that a 2014 U.S. Department of Justice inquiry into its EpiPen pricing could result in a loss.

The SEC said in a Sept. 27 complaint that Mylan classified its epinephrine injector as a generic medicine, which allowed the company to pay less in rebates to the Centers for Medicare and Medicaid. The agency informed the company in October 2014 that the classification was incorrect.

Mylan's misclassification resulted in an overcharge of "hundreds of millions of dollars," according to the SEC.

A nearly two-year DOJ investigation beginning November 2014 resulted in subpoenas and calls for Mylan to settle the case. The company cooperated with those requests and settled for $465 million but did not alert investors to the possible financial consequences before that time, according to an SEC statement.

"As alleged in our complaint, investors were kept in the dark about Mylan's EpiPen misclassification and the potential loss Mylan faced as a result of the pending investigation into the misclassification," said Antonia Chion, associate director in the SEC's Division of Enforcement. "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."

The SEC filed the complaint with the U.S. District Court in Washington, D.C., on Sept. 27, and Mylan settled the same day. Mylan announced in July that it had agreed to settle the matter in principle and the amount was previously reserved, according to the company's Sept. 27 press release.

Mylan neither admitted to nor denied the SEC's allegations.