Pharma giant Sanofi wants a piece of the legal action against Mylan. The French drugmaker filed a lawsuit in a federal district court in New Jersey claiming that Mylan “engaged in illegal conduct to squelch … competition” and maintain the market monopoly of its EpiPen epinephrine auto-injector, thereby “harming both Sanofi and U.S. consumers.”
Sanofi contends that Mylan took underhanded steps to “squelch” competition from Auvi-Q, a rival product Sanofi marketed in the U.S. from 2013 until 2015, when it was pulled from the market because of possible dosing issues. Sanofi said Mylan also used “unprecedented” price rebates to persuade insurers, state Medicaid agencies and PBMs not to reimburse patients for Auvi-Q.
Given Mylan’s virtual lock on the market, after the recall Sanofi returned the rights to Auvi-Q to Kaleo, the company that developed the product. Kaleo addressed the dosing concerns and reintroduced Auvi-Q in February—with an even steeper list price than EpiPen’s.
Our Take: Mylan continues to fall deeper into the quicksand. Consider this timeline of events:
In response to constituents’ complaints, lawmakers began interrogating Mylan last September about the company’s exorbitant price increases for EpiPen, around the same time the New York attorney general’s office launched an investigation to determine whether certain terms of Mylan’s sales contracts with local schools violated antitrust regulations.
In October, the company agreed to pay a $465 million settlement in connection with charges by the Justice Department that it had misclassified EpiPen as a generic product in order to pay lower Medicaid rebates. That led to an investigation by the Securities and Exchange Commission.
All of the turmoil caused Mylan’s stock to drop, which in turn prompted a proposed class action lawsuit by investors.
Then, in January, the Federal Trade Commission initiated its own antitrust investigation. Additional class action lawsuits have ensued, including one filed in early April alleging that Mylan violated the RICO Act by paying substantial rebates to PBMs—essentially kickbacks—in exchange for favorable treatment.
Mylan’s is a cautionary tale for drug manufacturers who should be concerned about increased congressional scrutiny of drug prices. Johnson & Johnson and Merck earlier this year took preventive action by releasing detailed reports on their drug prices, and Allergan CEO Brent Saunders released a “Social Contract with Patients” in 2016, which included “responsible pricing ideals” as a pillar of the contract.