Mylan, CVS Defeat Class Status in EpiPen Price-Gouging Suit

Mylan, CVS Health Corp. units, and other health-care companies dodged a proposed class action from drug wholesalers over alleged price-gouging of the EpiPen after a Minnesota federal judge ruled the class doesn’t meet the standard for certification.

Plaintiffs Rochester Drug Co-Operative Inc. and Dakota Drug Inc. alleged Mylan, a unit of global drugmaker Viatris Inc., paid bribes and kickbacks to CVS Caremark and other pharmacy benefit managers—who work as a bridge between health insurance providers and drug manufacturers—to maintain a monopoly and increase prices of Mylan’s EpiPen, an auto-injector used to treat allergic reactions.

But the class isn’t large enough to qualify, the drug wholesalers won’t protect the interests of the class, and a common question of law doesn’t overpower questions affecting individual class members, Judge Eric Tostrud of the US District Court for the District of Minnesota ruled Monday.

The proposed class includes “a comparatively small class comprised of members with mostly large individual claims,” Tostrud said. Such a class can qualify under the numerosity requirement, but the “plaintiffs have not shown that their proposed class does,” he wrote.

Tostrud also found Rochester and Dakota didn’t meet the accurate-representation requirement to certify a class action.

“Rochester and Dakota cannot adequately represent the class because they claim to have been harmed by the same conduct that benefited other class members,” he wrote. EpiPen’s price increases benefited some class members because it resulted in additional service fees, rebates, and inventory appreciation, according to the opinion.

The wholesalers also weren’t able to show the alleged bribery-kickback scheme affected all class members, the court ruled. Federal law requires class-wide causation when certifying a class action.

Separately, the Department of Justice removed Mylan and its former president as subjects of an antitrust investigation into the generic drug industry, Viatris announced Tuesday. The US Supreme Court in April declined to revive antitrust litigation against Mylan brought by Sanofi SA over an alleged scheme to shield the EpiPen from competition.

Counsel for the plaintiffs and Mylan didn’t immediately respond to a request for comment.

Berger Montague PC, Garwin Gerstein & Fisher LLP serve as interim co-lead counsel for the plaintiffs.

Hogan Lovells US LLP represents Mylan. Spencer Fane LLP and Quinn Emanuel Urquhart & Sullivan LLP represent Express Scripts defendants. Faegre Drinker Biddle & Reath LLP and Williams & Connolly LLP represent CVS Caremark defendants. Stinson LLP and Alston & Bird LLP represent defendant OptumRx Inc.

The case is In re: EpiPen Direct Purchaser Litigation, D. Minn., Docket No. 0:20-cv-00827-ECT-JFD, 7/1/24.