26 April 2017

Just When You Thought That the EpiPen Folks Could Not Get Any Worse

In addition to price gouging and fraud, it now appears that Mylan Pharmaceuticals used nuisance lawsuits to lock itself in as a preferred Medicaid provider:
Pharmaceutical company Mylan sued West Virginia in 2015 to keep its EpiPens on the state’s “preferred drug list,” which, if successful, would mean that the state’s Medicaid programs would have to automatically pay for the pricey epinephrine auto-injectors.

The bold and unusual move by Mylan—which ultimately failed—is yet another example of the aggressive marketing and legal tactics the company used to boost profits from EpiPens, which halt life-threatening allergic reactions. Since Mylan acquired rights to EpiPen in 2007, the company raised its price by more than 400 percent. Mylan also allegedly made illegal deals with schools to undercut competitors and allegedly scammed federal and state regulators out of millions in rebates by knowingly misclassifying the device.

Last year, EpiPen’s sales and expanded markets brought in more than $1 billion in revenue for Mylan. The company’s CEO, Heather Bresch, is one of the highest-paid CEOs in the industry, earning nearly $19 million annually.
Additionally, the company offered discounts on the condition that competitors' products not be covered:

When Mylan dramatically increased the price of its life-saving EpiPen devices, it drew sharp rebuke all around for what seemed like a purely greedy—and heartless—move. But according to a lawsuit filed by French drug maker Sanofi, the move wasn’t just out of simple greed. Instead, it was part of an underhanded scheme to “squash” competition from Sanofi’s rival device, the Auvi-Q.

With the lofty prices and near-monopoly over the market, Mylan could dangle deep discounts to drug suppliers—with the condition that they turn their backs on Sanofi’s Auvi-Q—the lawsuit alleges. Suppliers wouldn’t dare ditch EpiPens, the most popular auto-injector. And with the high prices, the rebates wouldn’t put a dent in Mylan’s hefty profits, Sanofi speculates.

Coupled with a smear campaign and other underhanded practices, Mylan effectively pushed Sanofi out of the US epinephrine auto-injector market, Sanofi alleges. The lawsuit, filed Monday in a federal court in New Jersey, seeks damages under US Antitrust laws.
In short, Sanofi claims that “Mylan engaged in illegal conduct to squelch this nascent competition, harming both Sanofi and U.S. consumers.”
According to the lawsuit:
In particular, Mylan offered new and unprecedented rebates to commercial insurance companies, pharmaceutical benefit managers, and state-based Medicaid agencies (collectively “third-party payors”) conditioned exclusively on Auvi-Q® not being an [epinephrine auto-injector] drug device that those payors would reimburse for use by U.S. consumers.
I'm beginning to think that we need to start throwing people in jail for monopolistic conspiracies, because fines are increasingly seen to be just a cost of business.


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