EpiPen Lawsuit - racketeering! Collusion with Pharmacy Benefit Managers!

[audreyh1]

So, not only did Mylan significantly raise the price for their EpiPen product, but apparently they also arranged rebates with Pharmacy Benefit Managers that effectively kept competing cheaper products from succeeding in the market.

Hmmmm - these are the rats I've been smelling. Arrangements between drug companies and the pharmacy infrastructure, so the insurance companies and customers without insurance are left paying the high prices.

The lawsuit was filed on Monday in Tacoma, Washington, federal court by three EpiPen purchasers. It claims Mylan engaged in a scheme with pharmacy benefit managers, or PBMs - companies that act as intermediaries between pharmacies, insurers and drug companies - to dominate the market and overcharge consumers.

Although other lawsuits have been filed over EpiPen pricing, Monday's is the first to focus on the role of PBMs and to bring claims under the Racketeer Influenced and Corrupt Organizations Act, a federal law historically used against organized crime.

.....

The plaintiffs in Monday's lawsuit say Mylan paid large rebates to PBMs so they would favor EpiPen over competitors. In helping Mylan control 95 percent of the epinephrine auto-injector market, the rebates artificially inflated EpiPen's sticker price, resulting in higher costs for many patients, the suit said.

The lawsuit says the three largest U.S. pharmacy benefits managers - CVS Caremark, part of CVS Health (CVS.N); Express Scripts Holding Co (ESRX.O) and OptumRX, part of UnitedHealth Group Inc (UNH.N) - aided Mylan's alleged scheme. They were not named as defendants.

Mylan hit with new class action lawsuit over EpiPen pricing | Reuters

The plaintiffs in Monday's lawsuit say Mylan paid large rebates to PBMs so they would favor EpiPen over competitors. In helping Mylan control 95 percent of the epinephrine auto-injector market, the rebates artificially inflated EpiPen's sticker price, resulting in higher costs for many patients, the suit said.

The lawsuit says the three largest U.S. pharmacy benefits managers - CVS Caremark, part of CVS Health; Express Scripts Holding Co and OptumRX, part of UnitedHealth Group Inc - aided Mylan's alleged scheme. PBMs may later be added as defendants on the lawsuit, The Wall Street Journal reports.

Pharmacy benefit managers are the companies responsible for negotiating rebates to the prices drugmakers set, and are meant to favor the most effective drug. This is meant to help keep prices low. Many question how effective they are at doing that, however and some have said they could be part of the reason why prices are skyrocketing.

The plaintiffs are seeking damages to represent a nationwide class of EpiPen purchasers.

Mylan lawsuit over EpiPen - Business Insider

The suit says Mylan only disclosed that its price increases for EpiPen were due to the rebate payments to the PBMs last summer, after outrage exploded over the fact that a two-pack of the auto-injector devices was selling for more than $600.

.........

The suit, filed in U.S. District Court in Seattle, noted that when EpiPen prices were increasing most dramatically, some other companies tried to introduce competing devices.

But those companies never succeeded in displacing the market dominance of EpiPen because they did not pay the same level of rebates that Mylan was paying the pharmacy benefit managers, the suit said.

Mylan hit with racketeering suit over big price hikes of EpiPen

I remember with MILs chemo, that they had supposedly "independent" foundations to help Medicare customers cover the co-pay on the outrageously priced new cancer drugs. Meanwhile Medicare (us) is stuck paying 80% on the full retail outrageous price. This arrangement should not have been legal, but companies had figured out how to arrange these "independent foundations" so that in practice it worked to their advantage.

I suspect lots of these types of "games" are going on with US increasing health care costs.

 

[travelover]

I suspect lots of these types of "games" are going on with US increasing health care costs.

Couldn't happen, with our ever vigilant congress critters looking out for the best interests of Joe Everyman.

 

[imoldernu]

https://www.usatoday.com/story/news/nation-now/2017/04/03/epipen-being-recalled-over-potential-defect/99977396/

Epipen recall.

This will save me $$$... Last purchase was within the time frame, so it will be a free renewal.

Now if they'd recall Colcrys.... :}

 

[audreyh1]

I know ya'll are having fun, but political commentary will get this thread closed.

I thought it was important to inform about why competition to EpiPen couldn't get off the ground, and what has come to light, and how it's being handled - in the courts.

I think it's OK to discuss anti-competitive issues in health care delivery.

 

[brewer12345]

It is amazing to see how the price of epi-pens soared as the competition was squeezed out by a variety of ways. This is a simple thing, an autoinjector of a substance that is not exotic or patented.

 

[audreyh1]

It is amazing to see how the price of epi-pens soared as the competition was squeezed out by a variety of ways. This is a simple thing, an autoinjector of a substance that is not exotic or patented.

Exactly!

I couldn't figure out why this one company had the market cornered!

Now I understand a lot better why!

 

[brewer12345]

Exactly!

I couldn't figure out why this one company had the market cornered!

Now I understand a lot better why!

My read is that they manipulated the regulatory machinery very adroitly to put pressure on their competitors.

 

[Gumby]

My read is that they manipulated the regulatory machinery very adroitly to put pressure on their competitors.

They are certainly not the only pharmaceutical company to do that. Many of them engage in a variety of shenanigans to thwart the introduction of generics.

 

[brewer12345]

They are certainly not the only pharmaceutical company to do that. Many of them engage in a variety of shenanigans to thwart the introduction of generics.

Of course. That is what regulatory machinery is for.

 

[samclem]

This particular drug/device was the subject of so much public outcry, so much investigation (press, Congress, FDA)--and this stuff only now comes out. This is a very widely prescribed med--I have to wonder if this sort of thing isn't very common--maybe the norm--in establishing the prices we pay for pharmaceuticals. The PBMs get their cut and their customers believe they are getting a fair price, the insurance companies pay a higher price, but hardly care because they can pass it all on to their policyholders (and, in some cases actually benefit by higher prices since their allowable profits eventually go up with their "medical loss ratio.")

It stinks, and it is systemic.

 

[audreyh1]

This particular drug/device was the subject of so much public outcry, so much investigation (press, Congress, FDA)--and this stuff only now comes out. This is a very widely prescribed med--I have to wonder if this sort of thing isn't very common--maybe the norm--in establishing the prices we pay for pharmaceuticals. The PBMs get their cut and their customers believe they are getting a fair price, the insurance companies pay a higher price, but hardly care because they can pass it all on to their policyholders (and, in some cases actually benefit by higher prices since their allowable profits eventually go up with their "medical loss ratio.")

It stinks, and it is systemic.

Seems like it. It is amazing that with all the public outcry and "investigations" it takes lawsuits to uncover this collusion.

 

[FlaGator]

It's "alleged collusion" at this point, and I'm always skeptical of cases filed by class-action attorneys.......

My Occam's Razor view is this is an example of "working the rule book", which goes on in every regulated industry (as already mentioned). IMO the primary beneficiaries of regulation are the entrenched incumbents.

And I was as shocked as the next guy when I had to pay >$300 after insurance for a 2 pack for my kid last year.

 

[Texas Proud]

I am glad that someone brought this suit... and I hope they win...

I have seen the CEO of Mylan on TV and she seems to blame everybody else except her company.... keeps trying to pass the buck... but, from what I have read Mylan is now making in profit what it used to cost retail a few years back... since most thing sold wholesale are 50% (or more) less than retail that means they are a big part of why it has gone up...

Now seeing that they also helped to enrich the other companies so they would be enriched is wrong...

 

[Fedup]

I have to say I don't like the Mylan CEO either from what I've seen on TV. But ever since the Martin Shreik guy and the Mylan CEO, biotech has been beaten down hard. They give these drug companies a very bad image.

 

[6miths]

Free market works... Totally.

 

[Sunset]

It is amazing to see how the price of epi-pens soared as the competition was squeezed out by a variety of ways. This is a simple thing, an autoinjector of a substance that is not exotic or patented.

Yes, and it replaces a very cheap needle and cheap bottle of drug.

OP - great to understand how the market was manipulated with (sort of) bribes.

 

[harley]

I know this was an April Fools article by the EFF (Electronic Frontier Foundation), and it's about Surveillance and Intelligence, but it could apply to this situation too.

* Surveillance Oversight Committees Confused `Oversight' and `Overlook'

The bipartisan leaders of the House and Senate Intelligence Committees
apologized during a press conference this morning for failing to provide
rigorous supervision of the intelligence community, blaming past years'
inaction on a fundamental misunderstanding of the word *oversight*. House
Intelligence Chairman Devin Nunes: ``It was merely a miscommunication. We
had mixed up the word *oversee* and the word *overlook*. We thought we were
supposed to overlook the mistakes of the intelligence community, not provide
oversight.'' Senate Intelligence Committee Richard Burr said, ``We
unequivocally condone the privacy invasions committed by U.S. intelligence
agencies. Oh shoot, I mean condemn.''

 

[JoeWras]

They are certainly not the only pharmaceutical company to do that. Many of them engage in a variety of shenanigans to thwart the introduction of generics.

My dad got hit by shenanigans with Namenda. They reformulated to XR. This is the latest game going on.

During the reformulation period, and before generics became legal, there was a period of a few months of severe shortage. I think it was intentional. And dangerous.