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

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.

Comments

Er...so it was about greed?

[xxxJonBoyxxx]

>> 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?

Re:Er...so it was about greed?

[ShanghaiBill]

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.

Re:Er...so it was about greed?

[phantomfive]

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.

Re:Er...so it was about greed?

[harrkev]

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

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

Re:Er...so it was about greed?

[ShanghaiBill]

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.

Re:Er...so it was about greed?

[Pseudonym]

Strangers in the night...

Re:Er...so it was about greed?

[Pseudonym]

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.

not holding my breath

[avandesande]

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

Re:not holding my breath

[PoopJuggler]

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

Damages

[Anonymous Coward]

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.

Re:GO DIRECTLY TO JAIL!

[CrankyFool]

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.

boo.

[rogoshen1]

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.)

Re:boo.

[fred6666]

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.

Not the whole story.

[Major Blud]

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."

Re:GO DIRECTLY TO JAIL!

[Cinnamon Beige]

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.

Mylan: Corporate Death Penalty

[WCMI92]

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.

Market

[fluffernutter]

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

Re:Market

[ghoul]

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.