Mylan $264 Million EpiPen Price-Gouge Deal Gets First Court Nod

Consumers and insurers leading price-gouging litigation over the EpiPen, a treatment for life-threatening allergic reactions, won preliminary approval from a federal judge in Kansas for their $264 million settlement with affiliates of Mylan NV, which markets the device.

Judge Daniel D. Crabtree tentatively signed off March 11 on the deal, which would resolve class action antitrust claims brought against Mylan in the U.S. District Court for the District of Kansas of behalf of “end payers” like insurers, pension funds, and consumers. He set a final fairness hearing for July 6.

The agreement broadly resembles a $345 million pact with Pfizer Inc. affiliates that formerly manufactured the EpiPen. Crabtree approved the Pfizer settlement, including a $115 million payday for the attorneys leading the case, in November. The deals are worth a combined $609 million.

The settlements don’t directly affect a parallel proposed class action proceeding in a federal court in Minneapolis with claims on behalf of “direct purchasers” like drug distributors.

The EpiPen lawsuits, which began after a public uproar over huge price hikes in 2016, initially alleged wide-ranging schemes to interfere with proposed generic epinephrine auto-injectors by bribing pharmacy benefit managers with massive secret rebates.

The Minnesota case still involves those claims. But the Kansas lawsuit has narrowed its focus to allegations that Mylan “traded” a settlement of its patent claims against Teva Pharmaceutical Industries Ltd. for a deal resolving an unrelated infringement case Teva had brought against Mylan.

Crabtree in June advanced claims that Mylan “paid” Teva to shelve its generic EpiPen by giving it suspiciously favorable terms in the other settlement the companies reached the same day.

If true, the judge said, the allegations establish the sort of “reverse payment” deal—so called because it involves concessions from a plaintiff to a defendant, rather than in the usual direction—that has faced antitrust scrutiny since a landmark 2013 decision by the U.S. Supreme Court.

Mylan also recently dodged antitrust claims by rival Sanofi SA, which alleged a web of exclusive agreements aimed at keeping its competing “Auvi-Q” product off of pharmacy shelves. Sanofi has appealed the decision dismissing that case.

Pfizer late last year spun off its generics business, Upjohn, and merged it with Mylan to form Viatris Inc.

Robbins Geller Rudman & Dowd LLP, Keller Rohrback LLP, Sharp Law LLP, Pritzker Levine LLP, and Burns Charest LLP are co-lead counsel for the plaintiffs. Mylan is represented by Hogan Lovells US LLP and Lathrop GPM.

The case is In re EpiPen (Epinephrine Injection, USP) Mktg., Sales Practices & Antitrust Litig., D. Kan., No. 17-md-2785, 3/11/22.