Mylan Faces Product Recall and Lawsuit Over PBM Deal

Following news of a global recall of batches of EpiPen, Mylan NV has also been hit with a class action lawsuit claiming the company struck a deal with pharmacy benefit managers (PBMs) over the price of the allergy treatment.

Mylan’s EpiPen saga began after reports on the steep price hikes of the EpiPen—a device that can be used to inject epinephrine under life-threatening allergic reactions—were recounted. The 2-pack injection cost less than $100 in 2007 when Merck was distributing it, and by summer 2016, the price crossed $600.

Mylan used a savings card and patient assistance program approach to reduce the impact of some of this backlash, but this was not received kindly. A group of senators wrote in a letter to Mylan, “Your discount programs…represent a well-defined industry tactic to keep costs high through a complex shell game.” Additionally, the company was entangled in a battle with Medicaid because it classified the EpiPen as a generic and paid a smaller rebate for it, although it marketed it as a brand name product to consumers and commercial health plans. This resulted in Mylan settling the dispute by paying $465 million to the US Department of Justice and federal healthcare agencies.

In the latest spate of problems, the FDA released a product recall alert on Friday of last week to consumers of EpiPen and EpiPen Jr due to “the potential that these devices may contain a defective part that may result in the devices’ failure to activate.” Thirteen lots of EpiPen, manufactured by Meridian Medical Technologies and distributed between December 17, 2015, and July 1, 2016, have been recalled for consumers in the United States. The company noted in its press release that it will replace the recalled devices for no additional cost to patients. The recall also extends across countries in Europe, Asia, and South America.

Then, on Monday, a new class action lawsuit was filed against Mylan in a federal court in Tacoma, Washington, by 3 purchasers of the EpiPen, claiming that Mylan was in scheme with PBMs for market control and overcharging consumers. The lawsuit claims that Mylan payed high rebates to PBMs to maintain its market dominance such that “from at least 2008 until 2011, EpiPen had a 95% market share in auto-injectors.”

While the lawsuit names CVS Caremark, Express Scripts Holsing Co, and OptumRX as having aided Mylan in this scheme, the 3 PBMs have not been named as defendants.