Mylan hit with class action lawsuit over EpiPen pricing

September 6, 2016 2:15 PM EDT

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By Brendan Pierson

(Reuters) - An Ohio woman on Tuesday filed a proposed class action lawsuit against Mylan Pharmaceuticals Inc (NASDAQ: MYL) in an Ohio county court, claiming sharp price hikes for the company's EpiPen device violated the state's consumer protection law.

Mylan has raised the U.S. price of EpiPen, which is used to treat life-threatening allergies, from less than $100 when it acquired the product in 2007 to more than $600, drawing criticism from parents, consumer groups and U.S. politicians.

EpiPens automatically inject a dose of the drug epinephrine into the thigh to counter dangerous reactions to allergens such as peanuts, foods and bee stings. It has a 94 percent share of the market for such auto-injector devices.

A Mylan spokeswoman, Nina Devlin, had no immediate comment.

The company has defended EpiPen's high price, saying it spent hundreds of millions of dollars to improve the product. It has also said it recoups less than half the list price for EpiPens.

Tuesday's lawsuit was filed in the Court of Common Pleas for Hamilton County, Ohio, by Cincinnati resident Linda Bates, whose son requires an EpiPen.

“The outrageous, unconscionable and immoral high prices set by Defendant is nothing more than price gouging,” the complaint says.

It says the price increases violated the Ohio Consumer Sales Practices Act, which prohibits “unconscionable” acts in connection with consumer transactions, including taking advantage of a consumer’s “physical infirmities.”

Bates is seeking to represent a class of individuals in Ohio who purchased EpiPens from 2007 the present, which will require her to show that a class action is the most fair way to resolve the case.

In response to pressure from U.S. lawmakers, Mylan said last month that it would expand discount programs and launch a generic version of EpiPen for $300.

Nonetheless, U.S. Senators Richard Blumenthal and Amy Klobuchar, both Democrats, on Tuesday called on the U.S. Federal Trade Commission to issue a subpoena to Mylan about EpiPen's pricing.

The same day, New York Attorney General Eric Schneiderman announced he was launching his own investigation of whether Mylan violated antitrust laws in its contracts to provide EpiPens to some school systems.

The company is also facing a separate proposed class action lawsuit accusing it of gouging consumers by selling EpiPens only in packs of two. It was filed in late August in federal court in Michigan.

(Reporting by Brendan Pierson in New York; Editing by Alexia Garamfalvi and Dan Grebler)



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