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Mylan's Epic EpiPen Price Hike Wasn't About Greed -- It's Worse, Lawsuit Claims (arstechnica.com)

Posted by msmash on from the what's-happening dept.

Mylan engaged in a campaign to squash a rival to its EpiPen allergy treatment and artificially inflate the price of the drug to maintain a market monopoly, French drugmaker Sanofi said in a lawsuit. From a report: With the lofty prices and near-monopoly over the market, Mylan could dangle deep discounts to drug suppliers -- with the condition that they turn their backs on Sanofi's Auvi-Q -- the lawsuit alleges. Suppliers wouldn't dare ditch EpiPens, the most popular auto-injector. And with the high prices, the rebates wouldn't put a dent in Mylan's hefty profits, Sanofi speculates. Coupled with a smear campaign and other underhanded practices, Mylan effectively pushed Sanofi out of the US epinephrine auto-injector market, Sanofi alleges. The lawsuit, filed Monday in a federal court in New Jersey, seeks damages under US Antitrust laws.

33 of 159 comments (clear)

  1. Er...so it was about greed? by xxxJonBoyxxx · · Score: 5, Insightful

    >> Mylan's Epic EpiPen Price Hike Wasn't About Greed -- It's Worse
    >> Mylan effectively pushed Sanofi out of the US epinephrine auto-injector market

    Competitor A pushes competitor B out of the market to corner the market and drive up profits, right? In other words, it's about greed, right?

    1. Re:Er...so it was about greed? by ShanghaiBill · · Score: 5, Insightful

      In other words, it's about greed, right?

      It is also about bad laws and poor regulation. They are able to use their near-monopoly position to push their customers into exclusivity agreements, reducing competition, strengthening their market dominance, and unfairly harming consumers. In most cases, exclusivity agreements should be illegal.

    2. Re:Er...so it was about greed? by phantomfive · · Score: 3, Insightful

      Exclusivity agreements of this kind should be considered illegal by default. They are bad for society, and we've seen this in so many ways.

      It's what Microsoft was doing to keep Linux down. It's what Intel did to keep their competitors down. I heard something (on NPR I think the other day) about how syringe manufacturers used it to keep an innovative syringe design off the market, because it was a third party syringe. The hospitals wouldn't buy it, despite the fact that it was better, because of exclusivity agreements.

      I'm sure there are plenty of other examples.

      --
      "First they came for the slanderers and i said nothing."
    3. Re:Er...so it was about greed? by Bartles · · Score: 2

      Let's not forget the legislative assist from Obama that required all public schools to stock Epi-pens.

    4. Re:Er...so it was about greed? by harrkev · · Score: 4, Informative

      Don't forget that the CEO of Mylan is the daughter of a Democratic Senator.

      http://www.cnn.com/2016/08/24/...

      --
      "-1 Troll" is the apparently the same as "-1 I disagree with you."
    5. Re:Er...so it was about greed? by ShanghaiBill · · Score: 4, Informative

      Should be? How about is be?

      No. According to the FTC: "Exclusive dealing or requirements contracts between manufacturers and retailers are common and are generally lawful." The FTC also says: "Most exclusive dealing contracts are beneficial because they encourage marketing support for the manufacturer's brand.", which is, of course, total bullcrap.

      Under current law, exclusivity agreements are only illegal in very narrow circumstances, and it falls on their competitor (Sanofi in this case) to sue for relief at their own expense.

    6. Re:Er...so it was about greed? by JohnFen · · Score: 2

      This is why Adam Smith himself asserted that there can be no free market in the absence of regulation.

    7. Re:Er...so it was about greed? by FatdogHaiku · · Score: 2

      Should be? How about is be?

      If we're going off the grammar rails I vote for...
      do be

      --
      You have the right to remain sentient. If you give up the right to remain sentient, you will be elected to public office
    8. Re:Er...so it was about greed? by Pseudonym · · Score: 3, Funny

      Strangers in the night...

      --
      sub f{($f)=@_;print"$f(q{$f});";}f(q{sub f{($f)=@_;print"$f(q{$f});";}f});
    9. Re:Er...so it was about greed? by Pseudonym · · Score: 3, Insightful

      To say that "there can be no free market in the absence of regulation" is equivalent to saying that there can be no free market, period.

      For a fundamentalist definition of "free", that's accurate. There can be no free market. There is only "more free" or "less free". And even then, you're often talking about various freedoms traded off against each other.

      The real world is a balancing act which requires constant, nimble adjustment. Neither Bloated Government nor The Mythical Hand of the Market can efficiently supply this by itself.

      --
      sub f{($f)=@_;print"$f(q{$f});";}f(q{sub f{($f)=@_;print"$f(q{$f});";}f});
  2. not holding my breath by avandesande · · Score: 5, Insightful

    Bank fiasco 2008 nobody sent to jail Drug companies and medical companies numerous antitrust and illegal anti consumer practices, nobody in jail Banks knowingly laundering drug money nobody in jail

    --
    love is just extroverted narcissism
    1. Re:not holding my breath by PoopJuggler · · Score: 5, Informative

      Steal a loaf of bread to feed starving kids, THE SLAMMER!

    2. Re:not holding my breath by Dread_ed · · Score: 2

      A metric ass-ton of falsified credit applications call bullshit on your claim.

      --
      When the only tool you have is a claw hammer every problem starts to look like the back of someone's skull.
  3. Damages by Anonymous Coward · · Score: 5, Interesting

    If Sanofi proves its case, the judge should permanently revoke all patents in and related to EpiPen.

    Let's see which drug manufacturer wants to be the next one to kill the golden goose after that ruling.

  4. There needs to be a single price by Anonymous Coward · · Score: 2, Insightful

    To get some sanity in the drug marketplace there needs to be just a single price that the drug manufacturers charge. None of these crazy pricing schemes that really screw the uninsured or the underinsured that have to pay the top price.

    It's not just drugs, the entire medical industry has these crazy deals where the little guy who is the least able to pay ends up paying the most.

  5. Re:GO DIRECTLY TO JAIL! by CrankyFool · · Score: 5, Informative

    FWIW, and I speak as a Democrat here, Heather Bresch, CEO of Mylan, is the daughter of Sen. Joe Manchin, Democratic Senator from West Virginia.

  6. boo. by rogoshen1 · · Score: 4, Informative

    the thing that bothers me with this story is that you have a disconnect between government funded healthcare, and profit seeking private corporations.

    if you have a government entity such as medicare (or really any socialized institution), that essentially guarantees payment to a drug company for a treatment; coupled with a corporation which has a responsibility to shareholders to maximize profit.. The situation that arises absolutely incentivizes the company to charge as much as they can get away with, since after all the US gov't has essentially infinitely deep pockets. And a very similar situation arises with the military and higher education.

    And the shitty thing is, any attempt by the government to reign in profit margins and/or maximum price on a drug company would be met with the usual right winger response of "less regulation, free market!" (And this is coming from a republican.. I just don't get mental gymnastics on this level.)

    1. Re:boo. by fred6666 · · Score: 4, Insightful

      The government is also free not to cover your product, and can negotiate a better deal with your competitor.
      All other developed countries have a public health care system and it works just fine, they end up spending less on health care than the US with its private system, and the population is generally in better health condition.

    2. Re:boo. by Major+Blud · · Score: 2

      The government is also free not to cover your product, and can negotiate a better deal with your competitor.

      What happens when there is no competitor (as in the case of deflazacort)? Does the government just not pay for the drug and tell it's citizens "sorry, it cost to much"?

      I'm not try to criticize the single-payer approach, I'm genuinely curious about how this is handled.

      --
      If you post as Anonymous Coward, don't expect a reply.
    3. Re:boo. by thomst · · Score: 2

      rogoshen1 opined:

      the thing that bothers me with this story is that you have a disconnect between government funded healthcare, and profit seeking private corporations.

      if you have a government entity such as medicare (or really any socialized institution), that essentially guarantees payment to a drug company for a treatment; coupled with a corporation which has a responsibility to shareholders to maximize profit.. The situation that arises absolutely incentivizes the company to charge as much as they can get away with, since after all the US gov't has essentially infinitely deep pockets. And a very similar situation arises with the military and higher education.

      And the shitty thing is, any attempt by the government to reign in profit margins and/or maximum price on a drug company would be met with the usual right winger response of "less regulation, free market!" (And this is coming from a republican.. I just don't get mental gymnastics on this level.)

      Oh, it's a LOT worse than you think it is:

      http://www.motherjones.com/politics/2016/10/drug-industry-pharmaceutical-lobbyists-medicare-part-d-prices

      (Note that, while the above is a Mother Jones article on the subject, there are plenty of business pubication and c onservative-leaning websites that will tell you exactly the same thing.)

      In a nutshelll - for those of you who won't read the linked article - the Medicare Modernization Act, signed into law by George W. Bush on December 3, 2003, FORBIDS the Social Security Administration from negotiating drub discounts with pharmaceutical companies, despite the fact that Medicare/Medicaid (which are run by the SSA) is THE largest purchaser of prescription drugs in the world. That prohibition was added to the bill in order to persuade Congressmembers to vote for it (because pharmas donate lavishly to their re-election funds). So there's absolutely zero inducement in U.S. law to keep prices low - and every incentive to raise them to the stratosphere, so that the for-profit medical insurance companies can be offered significant discounts, with good, old Uncle Sucker taking up the profitability slack.

      Read the actual bill for yourself and be appalled:

      https://www.congress.gov/bill/108th-congress/house-bill/1

      --
      Check out my novel.
  7. Not the whole story. by Major+Blud · · Score: 5, Informative

    I had actually just finished reading this on Ars before coming here to see it at the top of the page. The summary leaves out a very important detail.

    Sanofi is suing Mylan claiming that their underhanded attempts cost them business. While that may be true, I think that this may have a more severe impact on their sales:

    "In 2015, Sanofi pulled Auvi-Q following quality control issues. The device has since been put back on the market by another pharmaceutical company, Kaléo. The list price of the newly released Auvi-Q is set at $4,500."

    --
    If you post as Anonymous Coward, don't expect a reply.
  8. Re:GO DIRECTLY TO JAIL! by Cinnamon+Beige · · Score: 4, Insightful

    Well, I suppose that saves Mylan on bribes to get that precious, precious regulatory capture that they've also been using to block competing tech from the US market.

  9. Mylan: Corporate Death Penalty by WCMI92 · · Score: 4, Interesting

    Their behavior deserves it. Their corporation is dissolved, all their executives (including Mizz Bresch) are banned from working in similar positions for life, and all their intellectual property is public domain.

    --
    Corporatism != Free Market
  10. EpiPen in Canada by Anonymous Coward · · Score: 2, Interesting

    is $14.00 for two.

    Just FYI.

    1. Re:EpiPen in Canada by raburton · · Score: 2

      £8.60 in UK - standard NHS prescription charge (although the British National Formulary lists the actual cost at £26 each). At least 2 other brands licensed in the UK, pretty much the same price.

    2. Re:EpiPen in Canada by Anonymous Coward · · Score: 2, Insightful

      £8.60 in UK - standard NHS prescription charge (although the British National Formulary lists the actual cost at £26 each). At least 2 other brands licensed in the UK, pretty much the same price.

      Bloody socialist medicine providing cheap EpiPens for for 1/20 of the US price. It's a disgrace.

      I am constantly amazed by Americans attitude to health care. You don't object to the govt building you roads why should you object to the govt providing you with a basic human right, decent health? I know why the govt thinks the way it does, thats easy, lobbying or as we say in here in England, bribery and corruption, but what puzzles me is why the Americans as citizens out up with this constant crap. Why is such a big deal for the govt to provide medicine?

  11. Alternatives by Gilgaron · · Score: 2

    We were able to get some Adrenaclick brand injectors at CVS recently for $10. I think it is $109 without coupon, still cheaper than Epipen. I had wondered about the coupons and discounts that the drug companies had, now it makes sense... they probably even write off the discounts on their taxes.

  12. Market by fluffernutter · · Score: 3, Funny

    Don't worry, the market will take care of it.

    --
    Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
    1. Re:Market by ghoul · · Score: 3, Insightful

      It just may not take care of it in a way you like. As far as the market is concerned all kids with allergies dying because of no epipen and hence the gene pool being cleansed of allergy genes is a valid outcome.
      So is the parents of such kids burning down Mylan and killing everyone on its board of directors (The market has no conscience)

      That is why we do not let unregulated markets play by themselves. Capitalism needs a tincture of socialism otherwise its just as bad as Communism just in different ways.

      --
      **Life is too short to be serious**
    2. Re: Market by fluffernutter · · Score: 2

      Without regulation, Bic might be able to start making an epi-pen but it will likely be found exploded in your bag when you need to use it. There is no realistic way to sell medical goods without regulation, it just needs the correct regulation.

      --
      Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
    3. Re: Market by sjames · · Score: 2

      APPROPRIATE regulation. The ban on re-importing drugs already made to FDA specs and exported to another country has no conceivable safety benefit. Particularly when the other country is also in the 1st world and has regulations of it's own similar to ours.

  13. Re:Don't worry by Overzeetop · · Score: 2

    Well, when all the people who need it have died, and that limitation is mostly pruned from the human branch of evolution, then the companies will no longer have a large market and they will have to reduce prices to meet the reduced demand. See, market forces always work! /s

    --
    Is it just my observation, or are there way too many stupid people in the world?
  14. yet more peanut panic and profiteering by xeno · · Score: 2

    Sigh... It's sad to watch the "peanut panic" crowd -- the people who claim all sorts of wild stats about allergy deaths unsupported by evidence -- and the companies that make money by giving them a soapbox. This US/UK-centered phenomenon is a cultural and economic situation, not a medical one. According to the Centers for Disease Control/CDC researchers and American Medical Association/AMA's actual reputable scientists (not med mfr salespeople), the verified death rate from the relevant allergens has been consistent for 50+ years, as long as they've been keeping statistics. No significant rise.

    What *has* happened is the massive thousand-fold rise in the number of people *diagnosed* with *some* anaphalactic reaction to peanuts and a zillion other irritants. When more people get *informed* there is a risk, the risk gets wildly exaggerated because of medical liability to any medical provider that does not address the completely-consistent-not-rising remote possibility of fatal reaction. And that translates into sales of expensive epi-pens from the company that conveniently funded the first and oft-cited major study into peanut allergy. And keeps funding other shoddy whitepapers on the topic. And keeps raising prices.

    These guys are thieves. Those people are fools. Nothing new under the sun.

    --
    I think not...(*poof*)