EpiPen Maker Mylan Sued State That Gave Preferred Status To Cheaper Alternative

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As the price for the EpiPen emergency allergy treatment soared by some 600%, Medicaid regulators in one state tried to de-prioritize the drug in favor of a less-expensive alternative. EpiPen’s parent company Mylan could have lowered the price on its signature product, but instead it chose to sue the state.

The folks at STAT News unearthed documents involved in a recent legal battle between Mylan and West Virginia, where in 2015 state officials sought to remove EpiPen and EpiPen Jr. from the state’s Medicaid Preferred Drug List.

When there are multiple therapeutically equivalent drugs, a state can choose to designate some as Preferred for Medicaid members, meaning the program will cover the cost of this prescription without issue. Similar drugs not on this list would require separate approval.

In Jan. 2015, a West Virginia Pharmaceutical and Therapeutics Committee held an open hearing on which epinephrine injectors should be included on the Preferred Drug List, and then voted [PDF] to move EpiPen off that list and replace it with lower-cost Auvi-Q.

That change would have meant EpiPen was no longer the default epinephrine injector for Medicaid recipients in West Virginia. But before that change could happen, Mylan asked a court to grant an injunction [PDF] blocking this revision of the Preferred Drug List.

Mylan argued that, in spite of the apparent public nature of the process, the Committee’s decision to strip EpiPen of its favored status was made long before the Committee meeting “outside of public view.”

Additionally, the drugmaker contended that the switch from EpiPen to Auvi-Q would put patients at risk, requiring them to either familiarize themselves with a new auto-injector or risk using a device they haven’t been taught to use.

However, the judge in the case denied the injunction request [PDF], noting that Mylan had “failed to identify any violation” of state laws regarding the open meeting process. The judge also pointed out that, EpiPen’s removal from the Preferred list doesn’t mean the drug is no longer available; it just requires prior authorization.

As for Mylan’s claim that it would suffer irreparable harm if removed from the Preferred list, the judge countered that, “based on this argument, no drug could ever be removed from preferred status.”

The court concluded that the state “is in a better position to make decisions regarding the [Preferred Drug List] than a pharmaceutical company with a direct financial interest in having its drug included in a preferred status on the PDL.” Allowing drug companies to block changes to the list could result in significant financial losses to the Medicaid program, noted the order.

Mylan appealed that decision, but serendipity intervened: In the fall of 2015, Auvi-Q was pulled from U.S. pharmacies following a recall of nearly 500,000 units. With no real competition on the market, EpiPen was returned to the West Virginia PDL.

However, notes STAT, the Mylan drug has since lost its preferred status in favor of the generic form of competitor Adrenaclick. Even the generic EpiPen, released in late 2016, is considered a non-preferred drug in the state. Auvi-Q, now being made by Kaleo, is expected to return to U.S. pharmacies this year. It’s not known if it will regain its spot on the PDL.

Mylan has additional history with West Virginia. Last year, the state’s Attorney General investigated the drug company for allegedly miscategorizing EpiPen in the Medicaid program, resulting in the state significantly overpaying for the injector.

The federal Centers of Medicare and Medicaid Services subsequently confirmed that Mylan had been incorrectly categorizing EpiPen for years. But before the exact amount could be sorted out, the Justice Department and Mylan reached a $465 million settlement over this issue — the details of which have still not been made public.

Mylan CEO Heather Bresch is not only from West Virginia, but her father is Joe Manchin, former governor of the state and one of its current U.S. senators.