The backlash against Mylan and the cost of its EpiPen for allergic reactions has reached the point that it is now being investigated to see if it violated antitrust laws for a program that gives the injectors away to schools for free.
The probe in New York, and a call for a federal inquiry, are on top of at least two consumer lawsuits tied to Mylan’s pricing of the pens.
New York Attorney General Eric T. Schneiderman Tuesday said his office was investigating Mylan Pharmaceuticals ($MYL) because it may have “inserted potentially anticompetitive terms” into contracts with New York local school systems. According to the agreement, linked to by STAT, schools must agree not to buy competitors products for 12 months as a condition to receive free injectors from Mylan.
At the same time, U.S. Senators Richard Blumenthal of Connecticut and Amy Klobuchar of Minnesota, sent a letter asking the FTC to investigate whether Mylan violated antitrust laws to protect its EpiPen product from competition. Blumenthal and Klobuchar, along with Sen. Chuck Grassley of Iowa, have already asked the Centers for Medicare & Medicaid Services to provide information on what Mylan’s price increases for the pens have done to the government’s prescription drug costs.
For weeks now, the Ireland-based company has been the target of drug price outrage after a barrage of reports of how it had raised the price of the pens from about $100 in 2007 when Mylan bought the product, to more than $600 today. Drug cost critics have pointed to everything from Mylan’s lobbying efforts in Congress to make EpiPen widely available at schools, to its headquarters move to Ireland to cut its U.S. tax bill, to bonuses its execs received as sales of the product soared, as evidence of what is wrong with drug pricing in the U.S.
Mylan has responded by saying the cost of the product is justified by its value. As the outrage has built, Mylan in quick succession widened its patient assistance program that helps poor people afford EpiPens, and has said it will begin selling a generic version at half the cost. But the actions so far have not quelled attacks.
A lawsuit filed in Ohio alleges the company violated consumer law--which prohibits companies from taking advantage of a consumer’s “physical infirmities"--by taking “unconscionable price increases” on EpiPen two-packs. The suit, brought by Linda Bates, says that she paid $50 for her son's EpiPen in 2015 and since learned a new package will cost $600.
"The outrageous, unconscionable and immoral high prices set by the Defendant is nothing more than price gouging,” the suit says.
A second suit filed in Michigan last month, Reuters reports, also accuses the company of price gouging by only selling the treatment in two-packs.
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