Mylan Rebate Suit Advances After New York Settlement

MANHATTAN (CN) — Two years after entering a $465 million settlement with New York over an EpiPen rebate scheme, Dutch pharmaceutical giant Mylan faces additional liabilities from its stockholders over similar conduct.

“The court agrees with plaintiffs that these allegations of anticompetitive effects are sufficient to survive a motion to dismiss,” U.S. District Judge Paul Oetken wrote Friday.

For nearly a decade, Mylan classified EpiPen as a generic drug for purposes of the Medicaid Drug Rebate Program.

Hammered by federal whistleblower actions, stockholder lawsuits and an embarrassing inspector general report, Mylan did not admit this practice was wrong when it agreed to pay New York nearly half a billion dollars over this conduct in 2017. 

With the class action against it advancing Friday, Mylan failed to completely turn the corner from their potential legal liabilities.

The ruling was not a complete victory for the stockholders: Judge Oetken ruled that their price-fixing allegations for generic drugs doxycycline monohydrate (“Doxy Mono”), glipizide-metformin and verapamil fell short.

“Plaintiffs often rely on circumstantial evidence of a price-fixing agreement, as opposed to direct evidence, because ‘this type of ‘smoking gun’ can be hard to come by, especially at the pleading stage,’” the 27-page ruling states. “And plaintiffs have failed to adequately plead such a smoking gun here.”

Jeffrey Lieberman, an attorney for the stockholders at Pomerantz, said he and his clients are “very pleased” with the ruling.

“We intend to vigorously prosecute this case in order to secure a significant recovery for our clients and the putative class,” Lieberman said in a statement.

Attorneys for Mylan and Malik did not immediately respond to email requests for comment.

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