$96.5 Million Generic Payout Latest Trouble for Mylan

Although Mylan recently launched a generic version of its epinephrine auto-injector, EpiPen, it continues to face criticism over the high cost of the product. Adding to its problems, Mylan Pharmaceuticals was recently forced to pay millions to settle an antitrust lawsuit over one of its generic drugs and then $465 million to settle a government lawsuit over EpiPen.

Mylan said it would pay $96.5 million to settle claims that the company conspired to delay a generic version of modafinil (Cephalon’s Provigil) in exchange for payment from Cephalon. The settlement was unveiled after a decade-long court case in U.S. District Court in Philadelphia, according to Bloomberg.

A group of buyers (which did not include national chains such as Walgreens and Rite Aid) sued Cephalon in 2006, alleging the company improperly delayed generic competition to the narcolepsy drug. (Teva Pharmaceutical acquired Cephalon in 2011.) Mylan will offer buyers their allocated share of the settlement fund, minus legal fees, according to the settlement.

The lawsuit is just the latest in a series of pricing and competition issues Mylan has faced in the past year.

Last summer, patients, legislators, and health groups became outraged after the price of EpiPen spiked to more $600 per two-pack in 2016. Mylan quickly announced a discount program for the EpiPen, but that action did not quiet critics.

Then, Mylan said it would begin marketing the first generic version of EpiPen for around $300 per 2-pack in late August, a discount of more than 50% off the product’s list price.

Last fall, Mylan agreed to a $465 million settlement with the U.S. Department of Justice and other agencies for overcharging on the EpiPen. Mylan said the agreement resolves questions about whether its EpiPen Auto-Injector was improperly classified as a generic drug with the Centers for Medicaid and Medicare Services (CMS), thereby causing the federal government to pay more for the drug than it should have. Officials said spending on the EpiPen totaled nearly $1.3 billion from 2011 to 2015, according to The New York Times.

However, EpiPen had been classified with CMS as a noninnovator drug before Mylan acquired the product in 2007, “based on longstanding written guidance from the federal government,” according to a company statement. “The terms of the settlement do not provide for any finding of wrongdoing on the part of Mylan Inc. or any of its affiliated entities or personnel,” Mylan said in the statement.

To top off Mylan’s problems, some major pharmacy chains are now stocking generic epinephrine auto-injectors from other manufacturers. For example, CVS Health said it will be selling the authorized generic for Adrenaclick, made by Lineage Therapeutics, a subsidiary of Impact Laboratories. The price for the product will be $109.99 per two-pack – the “lowest cash price in the market,” CVS Health said on its web site.

 “We recognized the urgent need for a less-expensive epinephrine auto-injector, and are proud to offer a low-cost option at all CVS Pharmacy locations,” CVS Health said. The authorized generic is an FDA-approved device.