When Mylan dramatically increased the price of its life-saving EpiPen devices, it drew sharp rebuke all around for what seemed like a purely greedy—and heartless—move. But according to a lawsuit filed by French drug maker Sanofi, the move wasn’t just out of simple greed. Instead, it was part of an underhanded scheme to “squash” competition from Sanofi’s rival device, the Auvi-Q.
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 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.
In 2013, Sanofi began selling Auvi-Q, which works to quell life-threatening allergic reactions, just as EpiPen does. Sanofi priced Auvi-Q on equal footing with EpiPen. And, initially, Sanofi claims it showed promise of gaining market share and providing real competition to EpiPen, which at the time had more than 99 percent of the market, according to Mylan. But that all changed when Mylan began using dirty tactics, Sanofi alleges.
In short, Sanofi claims that “Mylan engaged in illegal conduct to squelch this nascent competition, harming both Sanofi and U.S. consumers.”
According to the lawsuit:
In particular, Mylan offered new and unprecedented rebates to commercial insurance companies, pharmaceutical benefit managers, and state-based Medicaid agencies (collectively “third-party payors”) conditioned exclusively on Auvi-Q® not being an [epinephrine auto-injector] drug device that those payors would reimburse for use by U.S. consumers.
Sanofi alleges that Mylan’s rebates jumped from less than 10 percent to 30 percent or higher. And as a consequence to third-parties taking the bait, Sanofi was blocked from nearly 50 percent of the market. When the rebates fully kicked in by December 2013, Sanofi’s market share sharply dropped from nearly 13 percent to 8 percent and then to 7 percent.
Meanwhile, Mylan used smear tactics, producing a study that seemed to question the Food and Drug Administration’s decision to deem Auvi-Q “bioequivalent” to EpiPen, Sanofi alleges.
Sanofi notes that the tactics are in line with other underhanded efforts by Mylan, including misclassifying EpiPen to regulators, which cheated federal and state governments out of millions, and making deals to provide schools with EpiPen if they agreed not to use rival devices. Mylan later removed the condition from deals with schools when it was publicized, which Sanofi alleges is tantamount to admission of guilt.
To demonstrate the overall effects of Mylan’s efforts, Sanofi points to data comparing Auvi-Q’s market share in the US with that in Canada. By 2014, Auvi-Q still lingered around 7 percent, while it neared 25 percent across the northern border.
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.
Mylan did not immediately respond to Ars’ request for comment.