Report: Mylan Offered Discounts To States If They Made It Harder For Patients To Get Alternatives

Controversial pharma company Mylan offered several states participating in Medicaid purchasing pools discounts on the EpiPen if they could ensure competitors’ products weren’t readily available to patients, according to a new report that raises additional concerns that the drugmaker engaged in anti-competitive practices as it raised the price of the life-saving drug nearly 400% in just 10 years. 

StatNews reports that emails between state health departments and a company that helps states negotiate drug prices for Medicaid patients revealed the drugmaker offered exclusive rebate offers on the price of the EpiPen if they made it harder for customers to access competing products.

It should be noted that such deals aren’t illegal, and are often used in the pharmaceutical industry.

Many drugmakers will offer discounts to states who place their products on State Medicaid program “preferred drug lists” to encourage doctors to prescribe some medications over others.

Being on the preferred list makes it easier for doctors to prescribe certain drugs; that’s because if a drug is not on the lists, doctors would have to receive prior approval from the Medicaid program in order for the drug to be covered.

Again, while this isn’t an uncommon practice, lawyers tell StatNews that such “exclusive dealings,” especially when they include a company with a large market share, could leave companies open to antitrust litigation.

This could be the case for Mylan, which is already facing an anti-trust lawsuit from drugmaker Sanofi, which accused the company of signing exclusive contracts to maintain a dominant place in the market.

The emails obtained by StatNews could give credence to these allegations.

An Oct. 2015 email between Magellan Health, the company facilitating deals between states and drugmakers, and the Nebraska Department of Health and Human Services sheds light on Mylan’s discounts.

For instance, the company was offering a rebate to states participating in two Medicaid purchasing pools that are administered by Magellan. That offer, the emails show, provided “enhanced savings for making EpiPen the exclusive epinephrine delivery systems [sic] on the [preferred drug list].”

Another email was more blunt, noting that the rebate required EpiPen to be the only preferred product, specifying that neither epinephrine generic nor Auvi-Q can be preferred.

It’s unclear from the emails how much states stood to save if they took Mylan up on its offer or which states participated in the discount.

However, StatNews reports that data obtained from the Nebraska Department of Health and Human Services reveals EpiPen and EpiPen Jr comprised 99.7% of the prescriptions for epinephrine auto-injectors Nebraska’s Medicaid program between May 2015, and July 2015.

Despite this, antitrust experts tell StatNews that because other pharmaceutical companies also offer such deals, a case against Mylan could be difficult to pursue.

This isn’t the first time Mylan has come under scrutiny for its Medicaid practices. Back in May, the Department of Health and Human Services indicated that taxpayers may have overpaid $1.27 billion for EpiPens over 10 years.

Before that, in Oct. 2016, Mylan agreed to pay $465 million to close the book on a federal investigation into its Medicaid pricing — all without admitting any liability. That deal was quickly met with criticism from lawmakers who were pushing for a proper Department of Justice investigation.

Sen. Elizabeth Warren (MA) sent a letter [PDF] to then U.S. Attorney General Loretta Lynch, calling the settlement “shamefully weak.” She noted that without criminal penalties and no deterrent value, the deal did nothing to “prevent drug companies from engaging in abusive schemes to defraud Medicaid and rip off taxpayers.”