A U.S. District Court judge gave final approval on November 17 to a $345 million settlement with Pfizer Inc. and its subsidiaries in a class action lawsuit over the EpiPen’s pricing.
Judge Daniel Crabtree of the U.S. District Court in Kansas found the settlement negotiated through an experienced mediator to be “fair, reasonable and adequate.” In agreeing to provide the fund, Pfizer Inc., which manufactures the EpiPen and its generic auto-injector equivalent, denies any wrongdoing.
Still $345 million is a big settlement. Will this be a financial windfall for consumers who joined the antitrust lawsuit over the steep rise in the price of the lifesaving auto-injectors?
It doesn’t appear so. The contentious legal wrangling preceding the agreement went on for more than four years, involved multiple law firms and the production of 1.75 million documents, “which Plaintiffs then carefully reviewed, analyzed, and organized,” according to one court document. One-third of the $345 million, plus considerable expenses will go toward legal fees.
As well, individual consumer complaints represent only 20 percent (about $44 million) of the claims to the remaining net settlement fund. The other 80 percent (about $173 million) will be awarded to third-party payers, such as insurance companies.
By mid-October 2021, more than 200,000 consumer claims had been filed, according to a plaintiffs’ court document, and had been anticipated by the November 12 filing deadline. Though it’s yet to be confirmed, the arithmetic of the settlement suggests individual consumers might stand to be compensated in the range of up to a couple hundred dollars each.
But that number could have been less if the lawsuit had carried on. In his order approving the settlement, the fees, and dispersal of the money, Crabtree says that if litigation had continued, those in the class action “might secure an unfavorable outcome.” He noted that in the event of a trial and a possible appeal, that would “delay any recovery that class members may achieve in future.”
Counsel for the plaintiffs are still assessing the consumer claims, and did not respond to Allergic Living’s questions about the approximate number of individuals involved (not all claims will meet requirements). Payments are expected to be distributed some time in 2022, Rex Sharp, co-lead counsel for the plaintiffs, said during the final settlement hearing in late October.
Anyone who “paid or provided reimbursement for some or all of the purchase price of branded or authorized generic EpiPens for the purpose of consumption” during August 24, 2011 to November 1, 2020 was eligible to file a claim.
Crabtree’s order approving the settlement ends consumer and insurer litigation related to the EpiPen and its generic version brought against Pfizer and subsidiaries Meridian Medical Technologies and King Pharmaceuticals.
“Pfizer is pleased that the court has approved the agreement to fully resolve plaintiffs’ class action claims against Pfizer. The company denies any wrongdoing and continues to believe that its actions were appropriate,” a Pfizer spokesperson wrote in an email to Allergic Living. “This resolution reflects a desire by the company to avoid the distraction of continued litigation and focus on breakthroughs that change patient lives,” the spokesperson said.
The final settlement breaks down like this:
- The approval grants one-third ($115 million) of the $345 million fund to attorneys’ fees.
- Additionally, it allows payment of expenses related to the litigation for plaintiffs’ counsel, payment to A.B. Data Inc., which implemented the class notice plan, payment for expenses to a union trust fund, and service awards for class representatives.
- The net settlement fund that remains after these fees, expenses and service awards that are outlined in Judge Crabtree’s ruling of almost $13 million are paid, is about $217 million.
- Of that, 80 percent will be awarded to third-party payers (insurers), and 20 percent will be awarded to consumers. Detailed information about the class action lawsuit can be found at EpiPenClassAction.com.
Mylan and Legal Action
The legal action against Pfizer, as well as Mylan NV (now Viatris), began amid an outcry over the quickly rising price of the EpiPen two-pack, which had jumped to over $600 by 2016. The hike was more than 500 percent above the approximately $100 price tag for a set of the devices in 2007, when Mylan acquired the auto-injector’s marketing rights.
Former Mylan CEO Heather Bresch testified before a congressional committee about the price hike in 2016, and Mylan, which markets the EpiPen, also faced accusations that it prevented competition in the auto-injector market. Pricing and marketing strategies, including rebating practices with pharmacy benefit managers, came under fire.
The class action lawsuit was filed in 2017, alleging that Mylan and Pfizer and its subsidiaries had engaged in anticompetitive conduct that violated federal and state antitrust laws.
Judge Crabtree ruled substantially in favor of Mylan/Viatris in June 2021, accepting the company’s call for a summary judgment that dismissed most antitrust claims, including those related to the federal Racketeer Influenced and Corrupt Organizations Act (RICO).
While the financial benefit of the Pfizer settlement remains unclear for consumers – both for individuals involved in the class action and for overall drug pricing, the resolution is part of continuing legal efforts regarding epinephrine auto-injectors.
Mylan/Viatris still faces a jury trial in January 2022 over allegations that the company and its competitor Teva Pharmaceuticals coordinated efforts to delay the launch of Teva’s generic epinephrine auto-injector.
In July, when the two sides initially agreed on the Pfizer settlement, attorney Sharp said he and the plaintiffs’ team looked forward to pursuing the remaining claims against Mylan before a jury.
July 2021: EpiPen Suit Update: Where It Stands
Pfizer Agrees to $345M to Settle EpiPen Price Hike Case
Allergic Living’s Guide: All About Epinephrine and Reactions