Mylan and CVS avoid class action lawsuit over EpiPen usury allegations

Mylan, CVS Health Corp. units and other healthcare companies have successfully averted a class action lawsuit alleging EpiPen price gouging. The ruling by Judge Eric Tostrud of the U.S. District Court for the District of Minnesota found that the plaintiffs did not meet the necessary standards for certification of a class action.

The lawsuit, filed by Rochester Drug Co-Operative Inc. and Dakota Drug Inc., accuses Mylan, a subsidiary of global pharmaceutical giant Viatris Inc., of engaging in bribery and kickbacks to CVS Caremark and other pharmacy benefit managers, who serve as a key link between health insurers and drug manufacturers and are alleged to have been involved in maintaining a monopoly and artificially inflating the price of EpiPen, a vital auto-injector used to treat severe allergic reactions.

However, Judge Tostrud concluded that the proposed class did not meet several important legal criteria. He found that the class, which was composed predominantly of members with significant individual claims, did not meet the required number of members for certification of a class action. “Plaintiffs have not demonstrated that their proposed class does so,” Tostrud wrote, emphasizing the class’s insufficient size and commonality.

Read more: Viatris subsidiary Mylan released from Justice Department antitrust investigation

In addition, the judge ruled that plaintiffs Rochester and Dakota had failed to meet the requirement of accurate representation. Tostrud pointed out that these companies could not adequately represent the class because they allegedly suffered harm from the same actions that other members of the class benefited from. According to the ruling, some members of the class benefited from the EpiPen price increases in the form of additional service fees, discounts and an increase in the value of inventory.

The court also emphasized that the plaintiffs failed to demonstrate that the alleged bribery and kickback scheme affected all members of the class equally, which is a prerequisite under federal law for certifying a class action.

This decision comes against the backdrop of ongoing legal battles and investigations against Mylan. In another development, Viatris announced on Tuesday that the Justice Department had dismissed Mylan and its former president from an antitrust investigation into the generic drug industry. In addition, the U.S. Supreme Court in April declined to reopen an antitrust case against Mylan brought by Sanofi SA. Sanofi SA accused Mylan of anticompetitive practices to protect the EpiPen from market competition.

Source: News Bloomberg Law