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Kansas Judge Grants Partial Victory To EpiPen Marketer In Suit Over Massive Price Hikes

Heather Bresch
Pablo Martinez Monsivais/AP
/
AP
Mylan CEO Heather Bresch takes her seat on Capitol Hill in Washington, Wednesday, Sept. 21, 2016, prior to testifying before the House Oversight Committee hearing on EpiPen price increases. Bresch, the daughter of Democratic Sen. Joe Manchin of West Virginia, defended the cost of the life-saving devices.

The case concerns whether Mylan sought to monopolize the EpiPen market after it dramatically hiked the price of the lifesaving device.

A federal judge in Kansas City, Kansas, granted a partial victory to the marketer of EpiPens in a massive class action case brought by consumers, but allowed antitrust claims against the company to proceed to trial in September.

In a 180-page ruling Wednesday, U.S. District Judge Daniel Crabtree granted summary judgment to Mylan N.V. and its former CEO Heather Bresch, the daughter of Democratic Sen. Joe Manchin of West Virginia, on racketeering claims and some antitrust claims but refused to toss out other antitrust claims.

The case concerns whether Mylan sought to monopolize the EpiPen market after it dramatically hiked the price of the lifesaving device, triggering public outrage and a congressional investigation nearly five years ago.

EpiPen is the brand name of an auto-injectable device that delivers the drug epinephrine, which is used to treat life-threatening allergic reactions known as anaphylaxis. Anaphylaxis is most commonly caused by food allergies but can also be caused by insect bites, medications and other substances.

In a statement, Mylan, now known as Viatris Inc., said it was pleased with the court’s decision to dismiss the plaintiffs' racketeering claims and antitrust claims that Mylan foreclosed competition through rebate arrangements with pharmacy benefit managers.

“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,” it said.

Attorneys for the plaintiffs declined to comment or did not respond to requests for comment.

Nationwide class action

The lawsuit, which consolidates five separate consumer cases that were filed in Kansas and other states, was moved to federal court in Kansas City, Kansas, in 2017 because of its geographical centrality.

In February 2020, Crabtree allowed the lawsuit to move ahead as a nationwide class action. Lawyers said millions of consumers could be eligible to recover damages if the case goes to trial or is settled.

The suit alleges that Mylan engaged in an illegal scheme to monopolize the EpiPen market by hiking its price more than 500% and offering discounts to pharmacy benefit managers in return for their pledge not to reimburse competing products.

Crabtree, however, ruled that the rebate contracts were short in duration and easily terminable, and therefore did not squelch competition.

And in a major setback for the plaintiffs, Crabtree also dismissed their racketeering claims, finding that they failed to show that mail or wire fraud led to inflated prices for the EpiPen. Under RICO, plaintiffs are entitled to triple damages plus attorneys’ fees if the judge rules in their favor.

The plaintiffs claim that Mylan violated the racketeering statute, known as RICO, by substituting two-pack EpiPens for single-pack EpiPens, stifling generic competition and entering into exclusive rebate contracts with insurers.

However, Crabtree declined to throw out the plaintiffs’ antitrust claims based on a settlement Mylan entered with generic drug manufacturer Teva in 2012. The settlement required Teva to wait until 2015 to launch a generic product comparable to the EpiPen.

Crabtree said the plaintiffs had produced evidence “from which a reasonable jury could conclude that the EpiPen settlement delayed generic entry by slowing Teva’s efforts to secure FDA approval before the settlement’s agreed-to entry date of June 22, 2015.”

The case is currently scheduled to go to trial on Sept. 7. In its statement, Viatris said it will defend itself "vigorously."

Big price hikes

Mylan acquired the right to market and distribute the EpiPen in 2007. At the time, an EpiPen package cost about $100. Today, it costs more than $650 without pharmacy coupons or manufacturer discounts.

At a hearing in September 2016, the late Rep. Elijah Cummings, the ranking Democrat on the House Oversight Committee, accused Bresch, Mylan's then CEO, of exploiting an “old cheap drug that has virtually no competition” and raising “the price over and over and over again as high as you can.”

In addition to Mylan, the plaintiffs sued Bresch under RICO. But Crabtree tossed the RICO claims against her as well.

Bresch, Sen. Manchin’s daughter, saw her pay rise from about $2.5 million in 2007 to nearly $19 million in 2015, the period when Mylan hiked the price of EpiPens by more than 500%. That triggered fury among EpiPen users, many of whom said they could no longer afford the device.

Bresch stepped down after eight years as CEO in 2020 following Mylan’s merger with Pfizer’s Upjohn unit to form Viatris.

Earlier this year, Crabtree ruled in favor of Mylan in another EpiPen-related case brought by Sanofi, a rival drug company. Like the plaintiffs in the consumer litigation, Sanofi claimed that Mylan violated antitrust laws when it offered rebates to insurers and pharmacy benefit managers that excluded Sanofi’s EpiPen-like device, known as Auvi-Q, from the lists of drugs covered by health plans.

Crabtree, however, said exclusive drug distributions are not illegal if they don’t involve threats or coercion.

Sanofi has appealed Crabtree's ruling.

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