Mylan (NSDQ:MYL) was hit with another class action lawsuit over the price of its EpiPen device yesterday. The lawsuit, which was filed in the Washington Western District Court, alleges that Mylan engaged in a scheme with pharmacy benefit managers to dominate the market and overcharge customers.
Although the Canonsburg, Penn.-based company has been hit with several lawsuits in the last year over the price of its emergency allergy treatment, this is the 1st to focus on the role of pharmacy benefit managers. The plaintiffs, 3 EpiPen purchasers, brought their claims under the Raketeer Influenced and Corrupt Organizations Act – a federal law that is traditionally used against organized crime.
Mylan spokeswoman, Nina Devlin, reportedly declined to comment on the new lawsuit.
Mylan’s EpiPen has undergone a dramatic price increase since the company acquired the device in 2007 – from less than $100 to more than $600 last year. Facing pressure from lawmakers and consumers, Mylan announced in December that it would sell a $300 generic version of the hand-held device.
The plaintiffs, who are seeking damages to represent a nationwide class of EpiPen buyers, allege that Mylan paid hefty rebates to pharmacy benefit managers to favor the EpiPen device over competitors, helping Mylan control the majority of the allergy auto-injector market. The rebates artificially inflated EpiPen’s price, which ultimately resulted in higher costs for consumers, the suit said.
The 3 largest U.S. pharmacy benefits managers – CVS Caremark, Express Scripts and OptumRx – allegedly helped Mylan dominate the market, the plaintiffs wrote.
The Federal Trade Commission is also investigating Mylan and the company said last year that it would fork over a $465 million settlement with the U.S. Dept. of Justice over the drug’s classification for government buyers, such as the Centers for Medicare & Medicaid.
Although Mylan CEO Heather Bresch has repeatedly defended the company’s price hikes, the plaintiffs in Monday’s lawsuit said that Bresch falsely depicted Mylan as a “victim” of a flawed healthcare system to evade responsibility for its actions.
Last week, Mylan said that its manufacturing partner, Meridian Medical Technologies, expanded an EpiPen recall to include the U.S. and other markets.
The move comes 1 week after Mylan recalled 81,000 EpiPen devices in countries outside the U.S. following 2 reports that the allergy auto-injector failed to work in emergency situations.
