Mylan Faces Potential Class Action Over EpiPen Price Hikes

in Food Allergies
Published: April 4, 2017

Pharmaceutical company Mylan NV has been hit with a proposed class-action lawsuit that alleges the firm took part in an “illegal organized scheme” to drive up prices of its EpiPen auto-injector sets and simultaneously stifle competition.

Mylan has been under fire because of an estimated 500 percent increase since 2008 in the list price of a two-pack of EpiPens, which rose to about $600 for a set.

The new lawsuit was filed in federal court in April 2017 in Washington state on behalf of three EpiPen purchasers. It alleges that systematic price increases allowed Mylan to pay high rebates to pharmacy benefit managers (known as PBMs) who negotiate prices for insurance companies and can place drugs on preferred formulary lists.

The lawsuit claims that Mylan took actions that violate the federal racketeering (RICO) law as well as various state-level consumer protection laws. It contends the price scheme was deliberate and “designed to increase profits and guarantee Mylan’s EpiPen is chosen by insurance companies for use over its competitor’s alternatives.” The price inflation, it says, left epinephrine consumers with “crushing out-of-pocket expenses.”

A spokesperson for Mylan said the company had no comment on the lawsuit at this time. None of the allegations have been proven to date. While a few other citizens’ lawsuits have been launched over EpiPen pricing, this is the first to make claims under the racketeering law.

Steve Berman
As the controversy was arising over EpiPen prices, Mylan’s CEO Heather Bresch spoke of the drug pricing system as being “broken”. In an interview with CNBC in August 2016, she said that drug companies pay large rebates to PBMs and, to a lesser extent, fees to distributors and pharmacies, so she couldn’t control the ultimate price charged to consumers for a set of EpiPens.

Steve Berman, managing partner of Hagens Berman, the firm acting for the patients in the Washington lawsuit, criticizes that argument. “Mylan has tried to pass the buck … attempting to wash its hands of the dubious scheme that has plagued allergy sufferers with unbearably high prices,” he said in a media release. Hagens Berman is seeking class-action status for this lawsuit. In January 2017, it filed a similar suit over pricing against companies that sell insulin for diabetes.

In its Mylan complaint, Hagens Berman also contends that the largest PBMs – CVS Caremark, Express Scripts Holding and UnitedHealth Group’s OptumRX – engaged in the alleged scheme. However, they are not named as defendants.

The suit claims that the Adrenaclick auto-injector was withdrawn from the market because PBMs did not place the drug on formularies. However, a generic version of the device is now sold at CVS Health pharmacies for the lowest price in the epinephrine market.

In response to criticism of EpiPen price increases, Mylan increased its co-pay card on the EpiPen sets and also introduced a generic version of its brand name auto-injector. It is an identical device, with a list price of $300 for a two-pack.