Mylan hit with racketeering suit over big price hikes of EpiPen
Big drugmaker Mylan (MYL) was slapped Monday with a class-action racketeering lawsuit that claims the company engaged in an illegal scheme to dramatically increase the list price of its EpiPen anti-allergy device over the past decade.
The suit alleges that the "skyrocketing" list price of EpiPen for consumers was the result of Mylan's payments of rebates to pharmacy benefit managers — including CVS Caremark (CVS), Express Scripts (ESRX) and Optum Rx — which handle prescription drug benefit programs for insurance plans.
The suit claims violations of consumer protection laws of all U.S. states, as well as a violation of the Racketeer Influenced and Corrupt Organization Act. If granted class-action status, the suit would cover all consumers.
The suit says Mylan only disclosed that its price increases for EpiPen were due to the rebate payments to the PBMs last summer, after outrage exploded over the fact the a two-pack of the auto-injector devices were selling for more than $600.
A decade earlier, it cost consumers paying list price about $90 for EpiPen, which is used to treat a potentially fatal allergic reaction known as anaphylaxis. Since then Mylan had increased the list price of the device 17 times, the suit said.
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