MORGANTOWN – Mylan and its successor Viatris won a significant victory in a federal class-action antitrust suit alleging Mylan used its monopoly power to stifle competition and drive up the price of its EpiPen epinephrine auto-injector.
The case was filed in 2017 in U.S. District Court for the District of Kansas by a New York-based union health plan and a number of individuals. Last week, the judge granted Mylan partial summary judgment against the plaintiffs’ antitrust claims and summary judgment against their Racketeer Influenced and Corrupt Organizations (RICO) Act claims, including charges against former Mylan CEO Heather Bresch – who retired when Mylan merged with former Pfizer subsidiary Upjohn to become Viatris.
The revised complaint runs 400 pages. The judge’s detailed recounting of the case and analysis of the arguments runs 182 pages. Mylan NV, two if its subsidiaries, Bresch, Pfizer and two if its subsidiaries, including Meridian, which manufactures the EpiPen for Mylan, were named as defendants. The order applies only to Mylan and Bresch.
The ruling gives a history of the EpiPen, Mylan’s price hikes and failed efforts by competitors. It notes that the EpiPen epinephrine auto-injector (EAI) was approved by the FDA in 1980 but by 2007 fewer than 1 million people of the 43 million subject to anaphylaxis had access to an EIA.
In 2007, Mylan bought the company that sold the EpiPen and renamed it Mylan Specialty. Mylan began its market expansion by lobbying to change state laws barring EAI administration by school personnel and in 2012 launched EpiPen4Schools, which made free EpiPen devices available to K–12 schools across the United States.
In 2009, Mylan lauched an upgraded and enhanced EpiPen called the “Next Generation Auto-injector.
Starting in 2010, Mylan began discussion of ending the single-pack EpiPen in favor of what was later dubbed the 2-Pak in order to increase sales and profits, using in part medical guidance that some people needed two injections to fully treat their allergic reactions to justify the change,
The judge noted that Mylan sells EpiPens in single packs in every country in the world except the United States and France. From 2010, when EpiPen single packs still were available, and 2012, after the switch to the 2-Pak, Mylan’s net sales increased from $278.6 million to $623.3 million and Pfizer’s EpiPen revenue increased from $142 million to $225 million.
In 2007, Israel-based Teva undetook to launch an EpiPen competitor but various problems led to a string of delays and the launch took more than nine years. In 2012, Teva and Pfizer reached a settlement and license agreement stemming form patent litigation. It launched its adult-strength and child-strength EAIs in 2018 and 2019, respectively. Most EAI launches took only two to three years.
Among other competitors, Sanofi lauched the Auvi-Q in 2013 but recalled it in 2105 because of technical defects. Last December, Mylan won a lawsuit filed by Sanofi, also in Kansas federal court, that alleged Mylan employed anticompetitive tactics to snuff out the Auvi-Q.
In 2016, Sanofi recognized it couldn’t compete and returned Auvi-Q’s rights to developer Kaléo, which brought it back to market in February 2017, attempting to charge $4,500 – offering it for free to the patient and charging the insurer the full price.
Sanofi alleged some of the some charges that the plaintiffs in this case put forth: that Mylan erected a number of artificial barriers to stifle competition, including rebates to commercial insurers, pharmaceutical benefits managers and states on the condition they not reimburse for Auvi-Q prescriptions, and misclassifying EpiPen to federal and state Medicaid agencies.
Plaintiffs in this case alleged Mylan told pharmacy benefit managers that if they wanted to secure larger rebates Mylan would require restrictions on Auvi-Q. Also in anticipation of Auvi-Q’s launch, Mylan increased the EpiPen’s price to wholesalers several times in order to have the flex to grant larger rebates.
In 2017, Mylan agreed to pay $465 million to the Department of Justice to resolve claims that it knowingly misclassified the EpiPen as a generic drug to avoid paying rebates owed to Medicaid.
Discussing summary judgment, the judge declined to grant summary judgement on the plaintiffs’ claim that Pfizer and Teva entered into a “reverse payment” settlement that unlawfully delayed generic competition from entering the market and competing against the EpiPen. That claim will go to trial.
The judge did grant summary judgment on plaintiff’s claim that Mylan foreclosed competition – with Sanofi – by entering unlawful exclusive dealing arrangements in the form of Mylan’s rebate agreements with pharmacy benefit managers.
The judge said no reasonable jury could find or infer that Mylan’s exclusive rebate contracts coerced payors into accepting their terms or excluded competitors, that only Mylan used exclusive contracts or that Mylan’s contracts foreclosed the market.
Regarding the RICO claims, plaintiffs argued that Mylan used the interstate mails and wires in furtherance of a scheme to raise EpiPen prices by withdrawing the EpiPen single pack from the EAI market and requiring customers to purchase EpiPens exclusively in the 2-Pak based on a false medical rationale; by stifling generic competition through pay-for-delay settlements; and by foreclosing branded competition from Auvi-Q by entering exclusive rebate contracts with payors.
The judge said the plaintiffs failed to make their case and granted summary judgment to Mylan.
In a release about the ruling, Viatris said, “The company is pleased with the court’s decision to dismiss all of the plaintiffs’ claims under the federal RICO statute, which include claims asserted against Mylan’s former CEO Heather Bresch. The court also dismissed claims alleging that Mylan foreclosed branded competition through rebate arrangements with pharmacy benefit managers.”
Viatris notes that the only claim that will go to trial involves the Teva-Pfizer settlement, which Mylan played a role in announcing. The “ruling was not a decision on the merits of that claim and did not resolve the claim in plaintiffs’ favor. The court’s decision does, however, vindicate the company’s continued perseverance in defending itself against a series of claims over the past few years relating to EpiPen that have proven to be baseless, and provide the company with the opportunity to further defend itself vigorously in a trial currently scheduled to begin Sept. 7, 2021. The company firmly believes that Mylan’s conduct was lawful and pro-competitive, and that plaintiffs will have great difficulty proving damages resulting from Mylan’s actions.”
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