Life Science Compliance Update

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May 17, 2017

Sanofi and Mylan Are Preparing to Duke It Out in Court


On April 24, 2017, Sanofi-Aventis sued Mylan Inc. in a United States District Court in New Jersey over its effort to keep a rival to the EpiPen from gaining traction in the market. The filing claims that when Mylan learned Sanofi’s Auvi-Q was close to reaching the market in January 2013, Mylan hiked the price of the EpiPen, then offered pharmacy benefit managers (PBMs) and state Medicaid officials “new and unprecedented rebates” in exchange for commitments to keep Auvi-Q off of formularies, and keep EpiPen front and center.

These claims by Sanofi follow Congressional investigation into Mylan for anti-consumer pricing practices. Congress, the Department of Justice, and the Federal Trade Commission were just a few of the groups investigating the $600 list price for EpiPen (quadruple what it cost in 2008, just eight years prior).

In the filing, Sanofi claims that the Auvi-Q device received favorable reviews from physicians because it was smaller than the EpiPen and came with voice instructions that could assist another user or caregiver inject the epinephrine while under stress.

“Faced with this competitive threat to its EpiPen monopoly, and seeing Auvi-Q gaining share month-by-month after its launch, Mylan erected artificial barriers to US consumers’ access to and use of Auvi-Q,” the filing states. Sanofi claims Mylan took the following steps to protect market share:

  • Mylan “took the extreme step” of requiring schools that took part in its discount program would not use any rival to the EpiPen. The suit states that Mylan has since rescinded this step.
  • Mylan misclassified the EpiPen to state and federal health officials to pay lower rebates than required to Medicaid, which Sanofi said allowed the company to pay for inflated rebates to commercial payers.
  • Because of the price increases, Mylan could link steep rebates with conditions that payers and PBMs exclude Auvi-Q, “which third-party payers would (and did) find … practically impossible to refuse.”
  • Sanofi alleges that Mylan “engaged in misleading advertising and other promotional activities to poison the well for Auvi-Q with doctors, key thought leaders, and consumers.

Allegedly, the aforementioned actions by Mylan meant that Auvi-Q dropped from a 13% market share in late 2013 to 7% in 2014. However, according to the filing, Auvi-Q topped 30% of the market in 2015 in Canada, where Mylan does not market the EpiPen.

Sanofi outlines the fallout that Mylan has experienced, which includes a $465 million settlement with the Department of Justice and federal health officials for improperly classifying EpiPen with Medicaid. “But,” the suit says, “Mylan has never been called to task for its antitrust violations.” The suit asked the court to find Mylan guilty of violations of the Sherman Antitrust Act and award triple damages.

A smaller company now distributes the Auvi-Q device, Kaleo Pharma. Kaleo also markets an injection system from naloxone, the drug that can counteract an opioid overdose. This case is expected to shed some light on the economics of drug pricing, and is sure to bring drug pricing back to the forefront of American politics.

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