Mylan, CVS beat status class in EpiPen price gouging lawsuit

Mylan, CVS Health Corp. and other health care companies avoided a proposed class action lawsuit by drug wholesalers over alleged EpiPen price gouging after a federal judge in Minnesota ruled the lawsuit did not meet certification standards.

Plaintiffs Rochester Drug Co-Operative Inc. and Dakota Drug Inc. alleged that Mylan, part of global drugmaker Viatris Inc., paid bribes and kickbacks to CVS Caremark and other pharmacy benefit managers, which act as a bridge between health insurance providers and drug manufacturers, in order to maintain a monopoly and raise the price of Mylan’s EpiPen, an auto-injector used to treat allergic reactions.

But the class is not large enough to qualify, drug wholesalers will not protect the class’s interests and the mere question of law does not trump questions about individual class members, Judge Eric Tostrud of the U.S. District Court for the District of Minnesota ruled Monday.

The proposed class includes “a relatively small class composed of members with large individual claims,” Tostrud said. Such a class could qualify under the size requirement, but “plaintiffs have not shown that their proposed class does,” he wrote.

Tostrud also found that Rochester and Dakota failed to meet the thorough representation requirement to qualify as a class action lawsuit.

“Rochester and Dakota cannot properly represent the class because they claim to have been harmed by the same conduct that benefited other class members,” he wrote. The EpiPen price increases benefited some class members because they resulted in additional service fees, rebates and increased inventory, according to the opinion.

The wholesalers also could not show that the alleged bribery and kickback scheme involved all class members, the court ruled. Federal law requires class-wide causation to certify a class action.

Separately, the Justice Department has removed Mylan and its former CEO from an antitrust investigation into the generic drug industry, Viatris announced Tuesday. The U.S. Supreme Court in April declined to reopen an antitrust case against Mylan brought by Sanofi S.A. in connection with an alleged plan to protect EpiPen from competitors.

Attorneys for the plaintiff and Mylan did not immediately respond to requests for comment.

Berger Montague PC and Garwin Gerstein & Fisher LLP are serving as interim co-lead counsel for the plaintiffs.

Hogan Lovells US LLP represents Mylan. Spencer Fane LLP and Quinn Emanuel Urquhart & Sullivan LLP represent defendants Express Scripts. Faegre Drinker Biddle & Reath LLP and Williams & Connolly LLP represent defendants CVS Caremark. Stinson LLP and Alston & Bird LLP represent defendant OptumRx Inc.

Case Re: EpiPen Direct Purchaser Litigation, D. Minn., Case Number 0:20-cv-00827-ECT-JFD, July 1, 2024