SGT in the News: Mylan Can't Escape EpiPen Distributors' Antitrust Claims

January 19, 2021

January 19, 2021 - As reported by Khorri Atkinson of Law360, U.S. District Judge Eric Tostrud refused to grant Mylan Inc.'s request to dismiss a SGT's proposed class action lawsuit that accuses the drug manufacturer of engaging in anticompetitive practices, including paying bribes and kickbacks to pharmacy benefit managers, in order to maintain artificially high prices of its EpiPen. The so-called PBM defendants, including Express Scripts, Optum, and CVS Caremark, filed separate but identical motions to dismiss, claiming they did nothing unlawful outside of their normal commercial practices. However, Judge Tostrud disagreed with their arguments and ruled that drug distributors Rochester Drug Cooperative Inc. and Dakota Drug Inc. did allege plausible claims to keep the lawsuit going, at least for now.

The distributors alleged that Mylan paid higher rebates to each PBM defendant in exchange for favorable formulary placement and to ensure that the PBMs would not police its price increases. Mylan benefited from the higher prices, while the PBMs also benefited, as the amount they received in rebates and other fees was tied to the EpiPen's list price, and they did not share the wealth with their clients. This type of mutual benefit shows that enterprises had a common purpose.

The PBMs won their bid to release their corporate owners from the case. The judge found that their general public statements, in which they stated that the PBMs lowered their clients' costs by negotiating prices and rebates with their clients' interests at heart, are not enough to hold them liable under RICO.

The distributors brought the claims on behalf of themselves and a proposed class of other direct purchasers of EpiPen products. The case is In re: EpiPen Direct Purchaser Litigation, case number 20-cv-0827, in the U.S. District Court for the District of Minnesota.

Mylan is facing a number of legal challenges over alleged anti-competitive conduct related to EpiPen, including a trial in multidistrict litigation in Kansas that was originally scheduled for April but postponed because of the COVID-19 pandemic.

The case is In re: EpiPen Direct Purchaser Litigation, No.. 20-cv-0827 and is pending in the U.S. District Court for the District of Minnesota. 

Law360's reporting can be found here: Mylan Can't Escape EpiPen Distributor Antitrust Claims.