Mylan may have overcharged US for EpiPen by 1.27 billion dollar: HHS

The amount is nearly three times a proposed settlement that the company announced in October.

The analysis on the EpiPen payments, which was conducted by the Department of Health and Human Services' Office of Inspector General, was released by Republican Senator Chuck Grassley.

"Mylan and the Obama Administration reportedly were close to settling the overpayment for much less than $1.27 billion," Grassley said in a statement. "Taxpayers have a right to know what happened here and to be repaid whatever they are owed."

Grassley is the chairman of the Senate Judiciary Committee, which launched a probe of EpiPen pricing last year.

A Mylan spokesperson said the drugmaker continues to work with the government to finalize the settlement as soon as possible.

The company, which was already under fire for steep price increases on the devices, said in October it agreed to settle with the U.S. government for $465 million after it was accused of improperly classifying EpiPen with the Medicaid Drug Rebate Program as a generic treatment. Mylan did not admit any wronging.

Drugmakers pay a rebate of 13 percent to state Medicaid programs on sales of generics, rather than the minimum rebate of 23.1 percent on branded drugs.

Mylan shares closed down 1 percent, or 38 cents, at $38.98 on the Nasdaq on Wednesday.

(Reporting by Michael Erman; Editing by Leslie Adler)