In re Epipen
| Citation | 545 F.Supp.3d 922 |
| Decision Date | 23 June 2021 |
| Docket Number | Case No. 17-md-2785-DDC-TJJ,MDL No: 2785 |
| Parties | IN RE: EPIPEN (EPINEPHRINE INJECTION, USP) MARKETING, SALES PRACTICES AND ANTITRUST LITIGATION (This Document Applies to Consumer Class Cases) |
| Court | U.S. District Court — District of Kansas |
This case involves a certified class action brought by consumers and third-party payors of the EpiPen. They allege that the Mylan and Pfizer defendants, who manufacture and sell the EpiPen, violated certain state antitrust laws and the federal civil RICO statute. Doc. 2169 at 42, 44–45 (Pretrial Order ¶¶ 4.a., 4.d.).
This matter comes before the court on the summary judgment motion filed by the Mylan defendants (Doc. 2141).1 The Mylan defendants seek summary judgment against plaintiffs’ remaining claims: (1) state antitrust conspiracy and monopolization claims asserted under certain state laws;2 and (2) RICO claims asserted under 18 U.S.C. § 1962(c) & (d). Doc. 2169 at 42, 44–45 (Pretrial Order ¶¶ 4.a., 4.d.).
The court has considered the parties’ thorough and well-presented arguments. And, the court now is prepared to decide the motion for summary judgment.3
The following facts are either uncontroverted, or, where genuinely controverted, are viewed in the light most favorable to the consumer class plaintiffs, the non-moving party opposing summary judgment. Scott v. Harris , 550 U.S. 372, 378–80, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007).
is a serious allergic reaction that can be life-threatening if not promptly and properly treated. Doc. 2165-1 at 2 (Defs.’ Ex. 3).4 Epinephrine is the only appropriate first-line treatment for anaphylaxis. Doc. 2142-5 at 8–9 (Defs.’ Ex. 5).
An epinephrine
auto-injector ("EAI") is a device used to self-deliver a controlled dose of epinephrine. Id. at 9. EAIs have been available in the U.S. since the 1980s, when the EpiPen EAI first was approved by the FDA and marketed to consumers. Doc. 2169 at 4 (Pretrial Order ¶ 2.a.19.). But still, by 2007, fewer than one million of the 43 million patients who are at risk for anaphylaxis had access to an EAI. Reviewing the Rising Price of EpiPens: Hearing Before the Comm. on Oversight and Gov't Reform H.R. , 114th Cong. 17 (2016) (statements of Heather Bresch, CEO of Mylan), https://docs.house.gov/meetings/GO/GO00/20160921/105373/HHRG-114-GO00-Transcript-20160921.pdf (hereinafter, "Bresch Statements").5
In 2007, Mylan Pharmaceuticals, Inc. acquired Dey Pharma L.P. ("Dey"), which later was renamed Mylan Specialty. Doc. 2169 at 3 (Pretrial Order ¶¶ 2.a.7–8.). Dey had "the exclusive right and license to market, distribute and sell" EpiPen Auto-Injector in the United States under a Supply Agreement with Meridian Medical Technologies, Inc. ("Meridian"),6 which manufactures EpiPen products. Doc. 2142-6 at 4, 6, 35 (Defs.’ Ex. 7). So, since 2007, Mylan Specialty has marketed and sold EpiPen devices, which Meridian supplies under the Supply Agreement. Doc. 2169 at 3 (Pretrial Order ¶¶ 2.a.7., 2.a.11., 2.a.12.); see also Docs. 2142-6, 2142-7, 2142-8 (Defs.’ Exs. 7, 8, & 9).
The 2010 Supply Agreement established a "Joint Commercial Committee" ("JCC") designed to streamline "distribution of EpiPen products." Doc. 2142-7 at 29 (Defs.’ Ex. 8). The Agreement obligated Meridian to supply Mylan with the quantities of EpiPen products Mylan requested, for which Mylan compensated Meridian on a per-unit basis. Id. at 10, 17, & 42–44. Also, it requires Meridian to "prosecute and maintain any patents or patent applications" for EpiPen products. Id. at 27. Meridian held the "New Drug Application" ("NDA") for EpiPen and was thus responsible for filing advertising and promotional materials with the FDA until July 2013, when Pfizer transferred the NDA to Mylan. See generally Doc. 2142-10 (Defs.’ Ex. 11).
As Mylan developed its branding strategy for EpiPen, it recognized that anaphylaxis
was "[h]ighly prevalent but under-recognized and undertreated," that "[o]ne out of 25 people is at risk for anaphylaxis," that "1,500 people die from anaphylaxis each year," and that "5 out of 6 people at risk for anaphylaxis have not been prescribed an epinephrine injector[.]" Doc. 2142-11 at 7–8 (Defs.’ Ex. 12).7
Mylan developed a marketing strategy designed to expand anaphylaxis
awareness by focusing on schools. Doc. 2142-12 at 77 (Defs.’ Ex. 13).8 When Mylan acquired Dey, some state laws barred schools from keeping EAIs not prescribed to a particular child and prohibited school personnel from administering an EAI to a child who did not have a prescription, even in an emergency. Id. Mylan cites two examples where these prohibitions produced tragic and preventable consequences. See Noreen S. Ahmed-Ullah, Epinephrine Bill Sparked By Death of CPS Student Passes Legislature , Chi. Trib., May 18, 2011, https://bit-ly.ezproxy.lib.ntust.edu.tw/2ZU3gSv (describing the death of a seventh-grader who had an anaphylactic episode after eating food served at a classroom party and didn't have access to epinephrine); see also Emma Brown, Virginia First-grader Ammaria Johnson Dies After Allergic Reaction , Wash. Post, Jan. 5, 2012, https://wapo.st/2Ze2roH (reporting the death of a first-grader who had an allergic reaction at school and didn't have access to epinephrine ).9 So, Mylan worked to pass legislation in every state allowing schools to maintain epinephrine
not prescribed to a particular student and permitting school personnel to administer epinephrine to anyone experiencing an anaphylactic emergency. Doc. 2142-12 at 77 (Defs.’ Ex. 13). Forty-eight states adopted this legislation, and in 2013, President Obama signed the School Access to Emergency Epinephrine Act, which encouraged schools to keep epinephrine (whether an EpiPen or some other EAI) on-hand.10 Plaintiff's expert, allergist Dr. Jay Portnoy, agreed that this legislation providing access to epinephrine in schools is a "good thing." Doc. 2165-4 at 18 (Defs.’ Ex. 14) (Portnoy Dep. 139:7–12). Also, several named plaintiffs in this lawsuit agree this legislation was a "good idea." See, e.g. , Doc. 2165-5 at 7 (Defs.’ Ex. 15) (Bowersock Dep. 107:8–23); Doc. 2165-6 at 3–4 (Defs.’ Ex. 17) (Wemple Dep. 237:25–238:6); Doc. 2165-7 at 8–9 (Defs.’ Ex. 18) (Beaulieu Dep. 102:14–103:14).
In August 2012, Mylan launched the EpiPen4Schools® Program, which made free EpiPen devices available—"with no strings attached"—to K–12 schools across the United States. Doc. 2143-3 at 10–11 (Defs.’ Ex. 21) (Bresch Dep. 129:6–130:24); see also Doc. 2142-5 at 25–26 (Defs.’ Ex. 5). By 2017, Mylan had donated more than one million EAIs through this program. Doc. 2142-5 at 25 (Defs.’ Ex. 5). Patients have used these donated devices more than 2,000 times to treat anaphylaxis
in schools, accounting for up to 60% of the EAIs used in the participating schools. Id. Mylan's costs associated with this program totaled $71 million in the first four years alone. Doc. 2143-4 at 2 (Defs.’ Ex. 22).
Mylan implemented another marketing strategy in October 2009, when it launched the "Next Generation Auto-injector (‘NGA’)." Dey Launches and Unveils Next-Generation, Needle-Protected EpiPen(R) (Epinephrine) Auto-Injector with Enhanced Patient-Friendly Features , Mylan (Oct. 26, 2009), https://bit-ly.ezproxy.lib.ntust.edu.tw/38HRzCD.11 The NGA had several new features—including built-in needle protection—which made it the first EAI with no exposed needle before and after use. See id. ; see also Doc. 2143-5 at 2 (Defs.’ Ex. 23). Other new features included an ergonomically designed barrel to prevent the device from rolling out of reach during an emergency, a flip-top case for single-handed removal, and bright orange colors and arrows to help identify quickly the needle end of the device and to make the product more usable for people who are color-blind. Doc. 2143-5 at 2–3 (Defs.’ Ex. 23); Doc. 2143-6 at 2–3 (Defs.’ Ex. 25); Doc. 2143-8 at 4, 7 (Defs.’ Ex. 27).
Mylan reported in a securities filing that during 2008—the first full year after it acquired Dey—the net product profitability of EpiPen was $1 per device, and in 2009 that number increased to $2. Mylan N.V., Current Report (Form 8-K), Ex. 99.1 (Sept. 26, 2016), https://www.sec.gov/Archives/edgar/data/1623613/000119312516719397/d265624dex991.htm. A Mylan executive testified that the EpiPen franchise was "very undervalued" when Mylan acquired its rights. Doc. 2143-11 at 5 (Defs.’ Ex. 30) (Graybill Dep. 71:10–12). And, Joshua Parks, defendants’ pricing expert, opines that as late as 2009, EpiPen products likely were "not ... sufficiently profitable to justify [their] continued promotion at a major drug company." Doc. 2143-12 at 32 (Defs.’ Ex. 31) (Parks Expert Report ¶ 72).
Between 2009 to 2016, Mylan Specialty periodically increased the EpiPen's Wholesale Acquisition Costs ("WAC"). Doc. 2143-14 at 5 (Defs.’ Ex. 33) (Graham Dep. 67:5–10); Doc. 2143-12 at 16–28 (Defs.’ Ex. 31) (Parks Expert Report ¶¶ 33–63). The WAC is a list price that manufacturers charge wholesalers. Doc. 2143-12 at 15–16 (Defs.’ Ex. 31) (Parks Expert Report ¶ 32). The WAC is not the price that consumers or health plans pay for pharmaceutical products. Id. Mylan Specialty's largest WAC increase for EpiPen products (on a percentage basis) occurred in October 2009, when Mylan Specialty launched the Next Generation Auto-injector. Id. at 16 (Parks Expert Report ¶ 34). EpiPen's WAC increased by 20.1%. Id. ; see also Doc. 2143-13 at 2 (Defs.’ Ex. 32). Mylan Specialty's President testified that Mylan—not Pfizer—made EpiPen pricing decisions unilaterally. Doc. 2142-9 at 10 (Defs.’ Ex. 10) (Graham Dep. 103:12–17).
In September 2016, Mylan CEO Heather Bresch testified before the House Committee on Oversight and Government reform. Bresch Statements, 114th...
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