Epipen Case Analysis

The main controversy here is the question of whether or not Mylan was price gouging with the EpiPen. Unfortunately the answer to this question does not matter. It appears as tho the 500% raise in the price of the EpiPen over the past 7 years is ethically and morally wrong, but when it comes to the law they have done nothing wrong. Pharmaceutical companies are legally allowed to charge whatever they want for their products. The largest insurer in the United States of America, which is Medicare, actually rewards doctors for prescribing costly drugs. On top of being rewarded for issuing costly drugs, it is illegal for Medicare to negotiate prices on drugs. (Source) This most definitely does not help the price situation when it comes to pharmaceuticals.

There are multiple lawsuits that have recently hit Mylan regarding the EpiPen.

One of the lawsuits is classifying the EpiPen as a generic drug versus a brand named drug. This allowed Mylan to have to only offer a 13 percent rebate off the manufacturing price, versus a 23 percent rebate for a brand named drug. The department of justice was able to pursue legal action against Mylan, resolving the case for a $465 million settlement and having Mylan reclassify the drug as branded. (source) Mylan also has two lawsuits against them regarding trying to remove competition and domination of the EpiPen market. They are accused of manipulating insurers to only use their product by offering them large rebates, as well as specifically telling insurers they would only give them large rebates if they would not reimburse patients who bought a rival product from a pharmaceutical company named Sanofi.

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Mylan has also been accused of antitrust violations with it’s EpiPens and schools. Mylan was accused of supplying discounts to schools for their EpiPens, in return that the schools only purchase from them. Herbert Hovenkamp, a law professor at the University of Iowa has said, “It is illegal to issue a discount on the condition the customer not acquire a competitor’s goods, if the effect may be to substantially lessen competition.” (Source) Since Mylan is stated to have about an 89% hold on the EpiPen market, using these tactics to lessen competition can very well be an antitrust violation. (source) Mylan has stated that they do not currently have any contracts requiring the schools to only purchase their products, and research is still being conducted to see if Mylan has indeed broken any laws.
Through research, it seems as though many of the lawsuits on Mylan have been left in limbo, with more investigations being required.

Despite what results of these matters Mylan clearly has been up to some shady business, keeping out the competition and significantly raising their prices. No legal decisions have been made besides the one decision to have Mylan classify their drug as branded and pay a $465 million dollar settlement. My legal decisions for the price gouging and other lawsuits such as removing competition would most likely be in line with the decisions that have currently been made, which is nothing. More information and investigations need to be put forth to see how true all of the allegations are against Mylan. If indeed through investigations it is found factual that Mylan has used non competitive contracts and gave kickbacks to insurers, then I would find Mylan guilty of antitrust violations. (source) Unfortunately when it comes to the main price gouging subject at hand, my legal decision for the price gouging would have to be one of not guilty. Although ethically and morally Mylan may be in wrong, they have not legally broken any laws with setting their prices at what they are. If Mylan is found guilty for antitrust violations, then soon enough other companies should be able to get into the EpiPen market and hopefully help regulate the prices. Until the pharmaceutical manufacturers drug price laws are changed, competition is the best bet for keeping drug

prices affordable.