West Virginia Investigating EpiPen Maker Mylan For Alleged Medicaid Fraud, Antitrust Violations

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On the eve of a Congressional hearing on the soaring price and lack of competition for the EpiPen emergency allergy treatment, the attorney general for West Virginia has confirmed his office is investigating EpiPen maker Mylan for allegations of antitrust violations and Medicaid fraud.

WV Attorney General Patrick Morrisey confirmed the investigation today, revealing that he’d issued a subpoena to Mylan back in August, seeking documents and other information related to EpiPen, but that the company failed to meet the Sept. 7 deadline.

In response, Morrisey’s office has petitioned [PDF] a state circuit court to enforce that subpoena.

The state believes that EpiPen has been short-changing the West Virginia Department of Health and Human Services Bureau for Medical Services (BMS) by paying smaller rebates than it should have.

Drug companies pay different levels of rebates to BMS depending on whether a medication is considered an “innovator” or a “non-innovator.” The lower, non-innovator distinction, is usually reserved for generics, but Morrisey says that Mylan was paying that rate for EpiPen, even though it’s a brand-name drug.

This may constitute Medicaid fraud under state law, according to the petition.

The state also believes that Mylan may have violated state antitrust laws by filing an intellectual property suit against Teva Pharmaceuticals in 2012 over an in-development generic version of EpiPen.

Though Teva’s generic has since been rejected by the FDA (Teva says it plans to try again soon), the state contends that at the time of the lawsuit, Mylan was attempting “to exclude generic competition from the market, at least initially, by suing competitors for patent infringement.”

The two drug companies settled with an agreement that Teva could try to go forward with a generic after three years, but the petition notes that “Cooperating with, agreeing with, or conspiring with competitors to limit the availability of competing products is a violation of the Antitrust Act.”

Morrisey says that Mylan now controls up to 90% of the U.S. market for epinephrine auto-injectors, which has allowed it to raise prices from around $100 for a two-pack in 2009 to more than $600 for the same two-pack today.

The petition acknowledges that it’s not illegal to raise the price on a drug, but it is against the law to “maintain a monopoly through exclusionary conduct.”

“I have a statutory responsibility to investigate any potential antitrust violation,” explained Morrisey in a statement. “Consumers lose when competition doesn’t flourish.”

West Virginia — home state to Mylan CEO Heather Bresch, whose father is former a former governor, and current U.S. Senator for the state — is not alone in investigating Mylan.

New York state Attorney General Eric Schneiderman recently confirmed that his office was looking into antitrust concerns about the EpiPen4Schools program. Documentation for that program, which provides EpiPens to schools at a discounted price, appears to show that participating schools must agree to not purchase any drugs that compete with EpiPen.