EpiPen class action lawsuit against Mylan, Pfizer to continue, judge rules
- A class action lawsuit claiming Pfizer and Mylan violated antitrust and racketeering laws while managing the epinephrine auto-injector franchise EpiPen will continue, now that a federal judge has shot down an attempt by the companies to dismiss the case.
- The lawsuit alleges Pfizer and Mylan engaged in "an illegal scheme to monopolize the market" for epinephrine auto-injectors. The scheme allegedly involved raising the price of EpiPen and then using the higher margins to offer larger rebates and discounts to pharmacy benefit managers (PBMs) in exchange for better or exclusive formulary positions.
- Plaintiffs also claimed the companies abused patent law and regulatory processes to delay competitor products from coming to market. For example, they argue the defendants entered an "unlawful settlement agreement" in 2012 by which Teva postponed the launch of its EpiPen generic until mid-2015. Yet six months before that launch time, Mylan filed a Food and Drug Administration Citizen Petition, calling into question whether the copycat product was equivalent to EpiPen and thereby further stalling its market entry.
Mylan first acquired EpiPen in 2007. It would find the product increasingly important to the company's bottom line over the following decade, with annual sales climbing from around $200 million to $1 billion in 2015 and 2016.
Yet, how that growth came about has been a point of immense scrutiny for the specialty pharma. EpiPen's price rose more than 600% while under Mylan's ownership, drawing the ire of consumers and Congress.
To that end, Mylan has in recent years faced a pile of litigation for how it handled the EpiPen business. In 2017, the company formally agreed to pay $465 million to settle a federal lawsuit claiming it mischaracterized EpiPens as generic to avoid paying higher Medicaid rebates.
Mylan denied wrongdoing in the case, and appears to be doing the same in the class action lawsuits it and manufacturing partner Pfizer are involved in.
The suit in the U.S. District Court for the District of Kansas will continue despite Mylan and Pfizer's protests, however. While Judge Daniel Crabtree dismissed several of the plaintiffs' claims, he found there was adequate support behind the rest.
One of those was Mylan's dealings with PBMs, where Crabtree concluded the plaintiffs had made plausible antitrust claims.
"Mylan knew that Adrenaclick — as well as Auvi-Q — could not raise prices to inflate their margins sufficiently to offer rebates or discounts similar to those that Mylan was offering to PBMs," Crabtree wrote in a court document filed on Aug. 20, describing the plaintiff's rationale behind their antitrust claims.
"In 2014, CVS Caremark added Adrenaclick to its Formulary Drug Removals 6 List, effectively removing a consumer or other end-payor's opportunity to purchase Adrenaclick as an alternative to the EpiPen," he continued.
The plaintiffs also alleged that Mylan spent $4 million on lobbying efforts aimed at getting the School Access to Emergency Epinephrine Act passed. The law, enacted in 2013, provides federal funding priority to schools that stockpile epinephrine auto-injectors. Mylan then offered schools free or discounted EpiPens, but through deals that made them the exclusive supplier of epinephrine auto-injectors, in turn discouraging submarket competition, plaintiffs alleged.
"Mylan’s lobbying efforts proved enormously successful. Now, a majority of states permit their public schools to stockpile [epinephrine auto-injectors] while eleven states require EAI stockpiling," the Aug. 20 court document said. "Given the EpiPen’s dominant market position, the Act not only has provided EpiPen access to schools, but also it has mandated some schools to stockpile the product."
While Mylan rode high on EpiPen sales for quite some time, the pricing backlash and recent manufacturing snafus have crimped sales. The company now also offers its own lower-priced EpiPen generic, and just last week saw rival drugmaker Teva secure the first FDA approval of an EpiPen generic.
- U.S. District Court for the District of Kansas Judge order on Motion to Dismiss
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