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The Courts Businesses Medicine The Almighty Buck

Mylan's Epic EpiPen Price Hike Wasn't About Greed -- It's Worse, Lawsuit Claims (arstechnica.com) 159

Posted by msmash 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.
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Mylan's Epic EpiPen Price Hike Wasn't About Greed -- It's Worse, Lawsuit Claims More

Mylan's Epic EpiPen Price Hike Wasn't About Greed -- It's Worse, Lawsuit Claims

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  • Er...so it was about greed? (Score:5, Insightful)

    by xxxJonBoyxxx ( 565205 ) on Wednesday April 26, 2017 @12:25PM (#54306469)
    >> 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?
    • It's MS DOS all over again, apparently.

    • Re:Er...so it was about greed? (Score:5, Insightful)

      by ShanghaiBill ( 739463 ) on Wednesday April 26, 2017 @12:36PM (#54306555)

      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? (Score:4, Insightful)

        by phantomfive ( 622387 ) on Wednesday April 26, 2017 @01:03PM (#54306823) Journal
        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.
      • The funny thing about American government is that they seem to do enough to wreck any good natural market effects for the consumer and stop there. A company should not feel entitled to any amount of money when they are in an industry such as health care, and where it so vastly betters society overall to have access to their products.

      • To me this sounds like it was about power and monopoly. That's a bit worse than just greed, which is bad enough on its own. But I'll grant that there was a large component of greed in the actions.

    • Re: (Score:2)

      by TWX ( 665546 )

      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?

      I'm reminded of a line from The Simpsons from Mr. Burns. It went something to the effect of, "I love my money, but I'd give it all up... for just a little bit more."

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

    • could dangle deep discounts to drug suppliers -- with the condition that they turn their backs on Sanofi's Auvi-Q

      We've had antitrust laws [wikipedia.org] for over a century now, since Standard Oil was using similar tactics against competition. New "regulations" since then are mostly junk...

      Law-suits brought by the unfairly injured competitor seems like the best means of resolving these problems.

      • Re: (Score:2)

        by hawk ( 1151 )

        Standard Oil was accused of "predatory pricing" moving into an area, underpricing until the competition left, and then raising its prices using it's new-found monopoly power.

        It was only a couple of decades ago that anyone looked at the data.

        Turns out that they did indeed move in with lower prices, and that their competitors fled, but they kept the lower prices. (and why not? unlike their competitors, they were quite profitable at those prices).

        hawk

        • Turns out that they did indeed move in with lower prices, and that their competitors fled, but they kept the lower prices.

          Well, whatever they actually did, they were accused of jacking their prices back up after driving the competition away.

          This is one of those cases, when the facts do not really matter, ha-ha, only the public perception does...

  • not holding my breath (Score:5, Insightful)

    by avandesande ( 143899 ) on Wednesday April 26, 2017 @12:26PM (#54306481) Journal
    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 (Score:5, Informative)

      by PoopJuggler ( 688445 ) on Wednesday April 26, 2017 @12:35PM (#54306547)
      Steal a loaf of bread to feed starving kids, THE SLAMMER!

      • it shows the difference between The Little Guy and the 0.0001% when a guy can get charged for standing next to an open beer bottle left on the street and a BEERCORP can have a cargo ship of beer smash open on a dock and no charges would be filed.

        personally i think that the execs involved should go down for a couple hundred homicide charges (since i would bet that a buncha kids died as a result of this bovine manure)

      • Re: (Score:2)

        by sootman ( 158191 )

        Share movies online, OFF WITH HIS HEAD!

        Lameness filter, blah blah blah.

    • What if I told you that there weren't any laws broken during the banking fiasco of 2008? Yeah its shitty but that is the truth.

    • Re: (Score:2)

      by hey! ( 33014 )

      It's the Golden Rule.

  • Damages (Score:5, Interesting)

    by Anonymous Coward on Wednesday April 26, 2017 @12:35PM (#54306541)

    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.

  • There needs to be a single price (Score:2, Insightful)

    by Anonymous Coward

    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.

  • boo. (Score:5, Informative)

    by rogoshen1 ( 2922505 ) on Wednesday April 26, 2017 @12:45PM (#54306675)

    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. (Score:5, Insightful)

      by fred6666 ( 4718031 ) on Wednesday April 26, 2017 @12:53PM (#54306713)

      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.

      • 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.

        • When you are a single payer you have negotiating power to tell the company what you will pay for the product. Basically they go to a company and tell them, no you're not going to make $50 billion off of us but you can clear an extra $10 billion and you can take it or leave it. Usually they will take it.

        • Regarding that particular drug it seems it is much cheaper outside the US, and this seem to be the rule not the exception.

          But to answer your question, it must depends on countries but I doubt any country would offer a $1 billion/pill drug to its citizens even if proved effective.
          Drugs are covered by patents, the only reason why they can't be cloned and sold at lower price. These patents last for a few years so in the worst case the drug won't be offered for that period. But sometimes I guess it's cheaper to

          • There is a clause in the WTO licensing deal covering medical patents. Every national govt has the right to invoke it have a particular drug's patent suspended and have it manufactured as a generic if it is considered a public health emergency. For a drug where there is no alternative, which is shown to work and where the company is being unreasonable, the govt can always pull out the big gun. The US govt doesn't as its bought my Pharma lobbyists.

            • Thanks for pointing this out....I had no idea the TRIPS Agreement or Doha Declaration existed.
              https://en.wikipedia.org/wiki/... [wikipedia.org]
              (although it looks like Doha hasn't been passed yet, at least according to Wikipedia).

              So if a single-payer doesn't like the price Mylan is paying, they can essentially just declare it an "emergency" and issue a license to anyone else to make an Epipen without the threat of patent theft?

              • no need, there are already alternatives to epipen

                • True, but what about something where there are no alternatives?

                  • sounds like it, although this clause probably won't stay for long if countries start abusing it.

                    • Yeah I'm not sure if there's a legal process for declaring something a "health emergency" with the WTO. Do you know if anyone has gone to this extreme? The Wikipedia article for TRIPS made some reference to G.W. Bush doing it with generic AIDS medications being sold in Africa.

                      And thanks for keeping this civil. A lot of people on this thread are pretty quick to call me out as an idiot, when I'm generally trying to understand how this works. I really learned something today! I had never heard of TRIPS or D

                    • Re: (Score:2)

                      by ghoul ( 157158 )

                      This clause is like Nuclear Weapons. Its not meant to be used but its presence means that companies have to be reasonable. Of course a demonstration use would be a good deterrent and I would say the Epipen manufacturers have earned one.

        • Re: (Score:2)

          by smugfunt ( 8972 )

          What happens when there is no competitor

          With a national health service you have a monopsony—a single customer who can say "I'll pay this much and no more. Take it or leave it."

          Furthermore, when that customer is the government they can revoke patents, pass laws, nationalise companies etc.

          • "I'll pay this much and no more. Take it or leave it."

            So if the company says "we'll leave it", do the people who are being refused treatment raise hell about it? Or does this not happen with any frequency?

            I also fail to see how a single-payer somewhere in Europe or elsewhere could nationalize a company based in the U.S. like Mylan.

            • Re: (Score:2)

              by PPH ( 736903 )

              So if the company says "we'll leave it"

              ... then the government seizes the companies patents. And production facilities if necessary. See eminent domain [wikipedia.org].

            • Re: (Score:2)

              by smugfunt ( 8972 )

              Any local facilities can be nationalised. If that includes the relevant factory then it makes no difference where the head office is.

              Drugs companies often have more than one product, and few of them are the only alternative. A government can prevent them doing any business in their country at all. It can set up a lab to make the drugs itself, or hire another company to do it.

              However, in the UK at least, they tend not to take the muscular approach and I believe there have occasionally been cases where the r

            • So if the company says "we'll leave it"

              Maybe as a negotiation tactic.

              If the government price is profitable, they'll end up making it.

              And if they claim it can't be made profitably, maybe the government should auction off the patent. The auction winner can then supply the government at the listed price, or else return the patent.

              I also fail to see how a single-payer somewhere in Europe or elsewhere could nationalize a company based in the U.S. like Mylan.

              It's almost like you're completely unaware of history. When the facilities and tools are in those countries, they declare their intent and back it up with armed forces. If the foreign company doesn't like it, they have to

              • It's almost like you're completely unaware of history.

                Come on give me a little credit here. I may be wrong, but I doubt the EpiPen is made in Europe. If a drug is completely manufactured in the U.S. (or anywhere else for that matter), I don't think the E.U. would have much they could seize outside of intellectual property (which wouldn't prevent the company making it from still doing so in the U.S.)

                The GM fiasco in Venezuela doesn't really fit into this scenario, I don't think anybody has a single-payer system for automobiles, and Venezuela didn't seize GM's

                • Re: (Score:2)

                  by sjames ( 1099 )

                  Not a problem. Nationalize the patent and put the manufacture out to bid.

                • Mylan has facilities across Europe. And India. And the Middle East, Africa, and the South Pacific.

                  That said, I have no idea where EpiPens specifically are made. I'd be surprised if there is only one facility, as most pharmas like to have multiple sources for each product.

        • Re: (Score:2)

          by Rhipf ( 525263 )

          In some but not all cases there is a cap on what the government will pay for these drugs. They are large enough purchasers to put pressure on the pharmaceutical companies to keep the price low (one of the reasons US citizens have been known to go to Canada for to fill their prescriptions.

    • Re: (Score:1)

      by Anonymous Coward

      Europe has "government funded healthcare" or at least public healthcare and profit seeking private pharmaceutlical corporations. Europe also has about equally good medicines available.

      However, healthcare, including pharmaceutics, is cheaper in Europe than the US. It's still very high imho, but lower than the US. So somewhere your thinking is wrong I guess.

    • Re: (Score:3)

      by thomst ( 1640045 )

      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, FOR

    • "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.

      That's one theory. Another theory is that the US government can pay you as little as they like, because what other purchaser can make up that volume? (This is in fact how WalMart treats its suppliers and how they can drive supplies to sell to WalMart huge volumes below their manufacturing cost.)

      The reality of the situation is that Me

  • Not the whole story. (Score:5, Informative)

    by Major Blud ( 789630 ) on Wednesday April 26, 2017 @12:52PM (#54306703) Homepage

    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."

    • it's that quality control issues have negligible impact on sales unless there's a 100% death rate. Not among the drug's users, but among patients in general.

    • Re: (Score:2)

      by hey! ( 33014 )

      CVS has developed its own injector which it sells for $110.

    • This.

      My allergist sold me on the Auvi-Q (and insurance covered it) precisely because it was a better product than the EpiPen. Sanofi voluntarily pulled it due to QC issues (reports where the injector did not deliver the full amount of epinephrine) which was the right call, and folks like me sent their units back in and unexpired units got refunds.

      Another company bought it from Sanofi and, when they put it back on the market in early 2017, proceeded to set the list price at extortion levels. My pharmacy bene

  • Mylan: Corporate Death Penalty (Score:5, Interesting)

    by WCMI92 ( 592436 ) on Wednesday April 26, 2017 @01:14PM (#54306911) Homepage

    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.

    • You'd make a friendly dictator.

    • Re: (Score:2)

      by swb ( 14022 )

      You left out the part where the board and Ms. Bresch are stripped of all their assets and relocated to a communal farm on the outskirts of Harlan, Kentucky, where they are forced to rebuild their lives through manual labor and no health insurance.

  • EpiPen in Canada (Score:2, Interesting)

    by Anonymous Coward

    is $14.00 for two.

    Just FYI.

    • £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.

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        £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

  • Alternatives (Score:3)

    by Gilgaron ( 575091 ) on Wednesday April 26, 2017 @01:30PM (#54307075)
    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.

  • Market (Score:4, Funny)

    by fluffernutter ( 1411889 ) on Wednesday April 26, 2017 @01:35PM (#54307129)
    Don't worry, the market will take care of it.

    • Re:Market (Score:4, Insightful)

      by ghoul ( 157158 ) on Wednesday April 26, 2017 @02:16PM (#54307515)

      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.

      • Capitalism needs a tincture of socialism otherwise its just as bad as Communism just in different ways.

        I think the GP was being sarcastic...

  • Comment removed based on user account deletion

  • yet more peanut panic and profiteering (Score:3)

    by xeno ( 2667 ) on Wednesday April 26, 2017 @03:39PM (#54308275)
    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.
  • Money is a medium of exchange that equates my work to yours.. crafted so that we all add to the social value that the currency represents. Or .. that what I had heard. Did this Martin Shkreli dipweed start or just hilite the greed that is making healthcare too expensive? Good money for Good service, but aspirin does not cost $10. per tab and any Asswipe that thinks thats a good idea needs to be held accountable.

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