In re Epipen

336 F. Supp. 3d 1256
CourtDistrict Court, D. Kansas
DecidedAugust 20, 2018
DocketMDL No: 2785; Case No. 17-md-2785-DDC-TJJ
StatusPublished
Cited by24 cases

This text of 336 F. Supp. 3d 1256 (In re Epipen) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Epipen, 336 F. Supp. 3d 1256 (D. Kan. 2018).

Opinion

Daniel D. Crabtree, United States District Judge

This Order addresses the pending Motions to Dismiss in one of the two separate tracks of this MDL-the consumer class cases track. The consumer class track consists of cases filed by individual consumers or third-party payors who allege they purchased EpiPens for consumption by themselves, their families, or their members, employees, insureds, participants, or beneficiaries. After the Judicial Panel on Multidistrict Litigation *1276transferred five consumer class cases and one other filed by Sanofi-Aventis U.S. LLC ("Sanofi") to our court for coordinated and consolidated proceedings (Docs. 1, 5, & 9), the consumer class plaintiffs filed a Consolidated Class Action Complaint ("Class Complaint") (Doc. 60). The Class Complaint asserts federal and state antitrust claims, federal RICO Act violations, various state consumer protection law violations, and unjust enrichment claims. The Class Complaint also seeks class action certification.

The Class Complaint asserts its claims against two groups of defendants who are either sellers or manufacturers of the EpiPen. One group consists of defendants Mylan N.V., Mylan Specialty L.P., Mylan Pharmaceuticals, Inc., and Mylan's CEO Heather Bresch (collectively "the Mylan Defendants"). The other group of defendants consists of Pfizer, Inc., King Pharmaceuticals, Inc., and Meridian Medical Technologies, Inc. (collectively "the Pfizer Defendants"). When referring to both sets of defendants, this Order simply calls them, collectively, "defendants."

Defendants have filed separate motions asking the court to dismiss the Class Complaint. Doc. 92 (Pfizer Defendants' Motion to Dismiss Plaintiffs' Consolidated Class Action Complaint); Doc. 94 (Mylan Defendants' Motion to Dismiss Plaintiffs' Consolidated Class Action Complaint). The class plaintiffs have submitted an Omnibus Response to the Motions to Dismiss. Doc. 123. And both sets of defendants have filed Replies. Doc. 216 (Pfizer Defendants' Reply); Doc. 219 (Mylan Defendants' Reply). Also, on March 14, 2018, the Mylan Defendants submitted a Notice of Supplemental Authority under D. Kan. Rule 7.1(f). Doc. 394. The class plaintiffs filed a response, objecting to the supplemental submission. Doc. 403. Then, on July 6, 2018, the class plaintiffs filed a Notice of Supplemental Authority (Doc. 765), and the Mylan Defendants submitted a response to their submission (Doc. 785). On July 11, 2018, the class plaintiffs filed another Notice of Supplemental Authority (Doc. 781), and the Mylan Defendants filed a response to that submission as well (Doc. 803). Finally, on August 12, 2018, the class plaintiffs filed another Notice of Supplemental Authority (Doc. 874), and the Mylan Defendants filed a response to that submission (Doc. 889).

Thus, to say the least, the Motions to Dismiss are now thoroughly and fully briefed. After carefully considering the arguments presented by the parties' filings, the court is prepared to rule.1 For the reasons explained below, the court grants defendants' motions in part and denies them in part.

I. Factual Background

The following facts come from the Class Complaint. The court accepts the facts asserted in the Class Complaint as true and views them in the light most favorable to the class plaintiffs. Mayfield v. Bethards , 826 F.3d 1252, 1255 (10th Cir. 2016) (citation omitted).

The EpiPen2 is a disposable, prefilled automatic injection device that delivers epinephrine *1277(also known as adrenaline) to treat severe allergic reactions known as anaphylaxis. Anaphylaxis is a life-threatening allergic reaction that can occur rapidly after exposure to an allergen. Anaphylaxis manifests in a variety of symptoms, including swelling of the tongue and throat, vomiting, reduced blood pressure, difficulty breathing, and, if untreated, death. Most commonly, anaphylaxis is caused by food allergens, but medications, latex, insect bites, and other unknown substances also can cause anaphylaxis. About 15 million people have food allergies in the United States. One of every 13 children in the United States has serious food allergies. And, each year, allergic reactions account for some 200,000 emergency room visits. Anaphylaxis is always considered a life-threatening medical emergency.

Epinephrine is used to treat anaphylaxis and is available only by prescription. To treat anaphylaxis effectively, one must administer epinephrine immediately. As little as a thirty minute delay in applying epinephrine can cause death. As a result, patients prone to anaphylaxis are advised to carry an epinephrine auto-injector ("EAI") at all times. By doing so, a patient can use the EAI in an emergency when a risk of a severe allergic reaction presents itself.

In 2007, Mylan acquired the right to market and distribute the EpiPen. Pfizer is the exclusive supplier of EpiPens to Mylan. Pfizer provides Mylan with 100% of its EpiPen supply through two of its wholly owned subsidiaries-King Pharmaceuticals, Inc., and Meridian Medical Technologies, Inc.-who manufacture the epinephrine and hold the EpiPen patents. Since at least 2009, Mylan's market share of EAI devices in the United States EAI market has remained above 80%. Since 2009, Mylan's market share consistently has exceeded 90%, and, in 2012, its share was almost 100%. During the same time-and while the cost of the EpiPen's dose of epinephrine has remained about $1-Mylan has increased the EpiPen's price by more than 600%. In 2007, Mylan priced the EpiPen at $100. By 2016, Mylan was charging more than $600. In 2015, Mylan announced that the EpiPen had reached $1 billion in annual sales for the second consecutive year-up from $200 million in 2007.

The Class Complaint alleges that the Mylan and Pfizer Defendants have maintained a monopoly over the EpiPen market and its profitable revenues by devising an illegal scheme to monopolize the market for EAI devices. The Class Complaint asserts that defendants carried out their illegal scheme through several different avenues. The following paragraphs briefly summarize each one, as the Class Complaint describes them.

The Mylan Defendants Paid Pharmacy Benefit Managers (PBMs) to Exclude Competition

Pharmacy Benefit Managers ("PBMs") are third-party administrators of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program, and state government employee plans. More specifically, PBMs administer a health coverage provider's prescription benefit program by developing the coverage provider's formulary (the list of prescription benefits included in the coverage at various pricing "tiers"), processing claims, creating a network of retail pharmacies who provide discounts in exchange for access to a provider's plan participants, and negotiating with manufacturers. The significant majority of patients with prescription drug insurance coverage receive their benefits through a *1278third-party payor whose drug formulary is determined by a PBM. From 2013 to 2015, commercial third-party payors accounted for about 71% of the EAI drug device market in the United States.

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336 F. Supp. 3d 1256, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-epipen-ksd-2018.