Of interest to those New Jersey residents who are at risk of severe allergic reactions to certain foods or environmental substances is word that generic and specialty drug maker Mylan N.V. has been named in two potential class action lawsuits alleging the controversial pharmaceutical giant’s pricing and packaging strategies related to its EpiPen product are violations of multiple state and federal laws.
One suit, filed in Michigan, alleges that Mylan packages EpiPen in units of two as being solely for marketing and pricing reasons rather than for the product’s safe use and health benefits.
The second suit was filed in Ohio and alleges that Mylan’s pricing structure for EpiPen, which Mylan has set as about $600 for a package of two of the potentially lifesaving epinephrine auto-injector syringes, is a violation of that state’s consumer protection laws.
Class action status to a lawsuit may be granted if the plaintiff in the original lawsuit can show that there are numerous others who are “similarly situated” and therefore should be permitted to join the suit as additional plaintiffs although they are not direct participants in the actual court proceedings.
Central to both lawsuits is Mylan’s pricing of EpiPen, a product that delivers about $1 worth of drug but whose wholesale price has risen from $100 in 2009 to over $600 in 2016. Mylan’s share of the US market for EpiPen-similar products is estimated to be at least 85%. Mylan’s estimated cost to manufacture EpiPen is reported to be as low as $10 per unit. According to various sources such as required annual stockholder reports and filings with regulatory agencies, sales of EpiPen were in the neighborhood of $1.5 billion in 2015 and accounted for 40% of Mylan’s profits.
Mylan, the world’s second-largest generic and specialty drug company, has been embroiled in controversy for the past year over its pricing policies for its EpiPen product and its efforts to block any competition from competing products.
In addition to the two lawsuits mentioned above, Mylan has also been the target of a federal investigation by the Department of Justice into allegations that it fraudulently misclassified EpiPen under the federally-supervised Medicaid Drug Rebate Program in order to decrease the amounts of money that the company would owe the Medicaid programs of the states which had allowed coverage for prescriptions of EpiPen.
Mylan eventually settled the Justice Department probe by agreeing to repay some $465 million in fraudulently-earned profits as well as agreeing to tighten its internal accounting practices regarding the Drug Rebate program and to accept additional federal oversight of its rebate compliance measures. During the federal probe, the Attorneys General of New York and West Virginia announced their own investigations into concerns that Mylan may have violated the antitrust laws of the respective states.
Cannonsburg, Pennsylvania-based Mylan has also been involved in a battle of press releases and drug regulatory agency filing with arch-rival Teva Pharmaceutical over Teva’s plans to market a competing product. Teva has contended that Mylan has used repetitive spurious and fraudulent regulatory filings to essentially bar any competition to EpiPen. Mylan appears to have won this war when the Food and Drug Administration rejected Teva’s product in March of 2016.
Over a century ago The Pure Food and Drug Act of 1906 was enacted and invested enforcement of the Act’s provisions with the Food and Drug Administration.
Although the FDA describes itself as “…the oldest comprehensive consumer protection agency in the U.S. federal government…” the public outrage over perceived “price gouging” and “virtual monopolies” by companies such as Mylan have led to more than a few class action suits in the courts. The rulings in these suits will almost certainly reflect opinions as to whether or not the FDA has lost the trust of the citizens it is supposed to protect.
Mark Sadaka from Pharma Watch Dog, the leading Drug Injury Attorney, has a national practice and works with clients from New York to Alaska.
