The internal watchdog at the U.S. Department of Health and Human Services warned the office tasked with administering federal health insurance programs that Mylan NV's EpiPen was improperly classified as a generic drug in 2009, Senator Charles Grassley said Tuesday.

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In a press release, Grassley's office said the HHS Inspector General confirmed in discussions with Senate aides that the watchdog office notified the Centers for Medicare and Medicaid Services about the problematic classification, which was highlighted in a report.

Mylan has since said it intends to pay $465 million to settle with the U.S. Justice Department over charges it misclassified the EpiPen as a generic instead of a branded drug, thereby underpaying rebates owed to state and federal Medicaid programs.