Mylan agrees to $264 million settlement in Kansas City, Kansas, litigation over EpiPen price hikes
Consumers and insurers charged that Mylan, Pfizer and other companies engaged in an illegal scheme to monopolize the EpiPen market by hiking the device’s price from $100 to $600.
The company formerly known as Mylan Inc. has agreed to pay $264 million to resolve class action litigation over huge EpiPen price hikes.
The settlement — if approved by a federal court in Kansas City, Kansas — comes atop a $345 million settlement last year of the same litigation by Pfizer Inc.
Mylan reached a settlement agreement shortly before the case was scheduled to go to trial on Feb. 22, and the terms were disclosed in court documents on Monday.
Mylan is now known as Viatris Inc., and is based in Canonsburg, Pennsylvania. The company did not immediately respond to a request for comment.
The settlement still requires approval by U.S. District Judge Daniel Crabtree, who is overseeing the litigation. But because the settlement is very similar to the one reached with Pfizer, which Crabtree approved last year, he is expected to give it the green light.
The litigation dates back more than five years, when numerous class action lawsuits were filed against Pfizer, Mylan and other defendants by consumers and insurers.
EpiPens are auto-injectable devices that deliver the drug epinephrine, which is used to treat life-threatening allergic reactions known as anaphylaxis. It is most commonly caused by food allergies but can also be caused by insect bites, medications and other substances.
The suits alleged that Mylan, Pfizer and their affiliates engaged in an illegal scheme to monopolize the EpiPen market by hiking the device’s price from $100 to $600, and offering rebates and discounts to pharmacy benefits managers and insurers in return for their pledge not to reimburse competing products. The price of EpiPen’s dose of epinephrine remained at about $1.
The suits also alleged the companies secured overlapping patents on minor changes to the EpiPen and then engaged in sham patent litigation to forestall competition from generic products.
In addition, they charged that Mylan offered public schools free or discounted EpiPens on the condition that schools enter into exclusive contracts with the company. Mylan reportedly spent $4 million lobbying Congress to pass the School Access to Emergency Epinephrine Act, which became law in 2013 and gives federal funding priority to schools that stockpile EpiPens.
At a congressional hearing in September 2016, the late Rep. Elijah Cummings, the ranking Democrat on the House Oversight Committee, accused then-Mylan CEO Heather Bresch 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.”
Even as Mylan raised the price of EpiPens, Bresch, the daughter of Democratic Sen. Joe Manchin of West Virginia, was rewarded with pay increases that saw her compensation rise from about $2.5 million in 2007 to nearly $19 million in 2015, a more than seven-fold increase. That triggered fury among EpiPen users, many of whom said they could no longer afford the device.
Bresch stepped down as CEO of Mylan in 2020 after Mylan merged with Pfizer’s Upjohn unit to form Viatris.
In 2017, Mylan paid the federal government $465 million for misclassifying the EpiPen as a generic drug, which allowed it to overcharge Medicaid by $1.27 billion.
And in 2019, it paid $30 million to settle a case brought by the Securities and Exchange Commission, which alleged Mylan had failed to disclose to investors the government’s probe into whether it overcharged Medicaid.
Last year, Crabtree dismissed racketeering claims against Mylan and Bresch, ruling that the plaintiffs failed to show mail or wire fraud led to inflated prices for the EpiPen. But he declined to dismiss 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.