The Consumer Union and several Senators question whether Mylan (MYL) engaged in a "pay for delay" scheme, in which it may have paid Teva Pharmaceuticals (TEVA) to delay the launch of a competitor Mylan's EpiPen.
Consumer Union sent a letter to the Federal Trade Commission on Sept. 7 urging the agency to launch a federal review of Mylan's actions, which it called anti-competitive. The investigation, if launched, would be similar to the one announced by the New York Attorney General on Tuesday. Along with the Consumer Union, Senators Amy Klobuchar (D-Minn.) and Richard Blumenthal, (D-Conn.) sent a letter to the FTC, urging it to review Mylan's practices on Sept. 6.
The complaints are the latest of several against the drug company, which boosted prices of the lifesaving auto-injector, EpiPen, to approximately $600 after acquiring the drug in 2007. The company has upped EpiPen prices approximately 25% each year, while the drug industry average is 10%. Since then, the company has announced that it will provide discounts to patients, as well as a generic version of the drug.
While the concessions are a benefit for consumers, they don't address complaints about a potential "pay for delay" scheme—where companies pay generic manufacturers to delay the entry of their drugs to the market—that some parties allege Mylan participated in. If Mylan is to be found as having participated in such a scheme, the company could be fined heavily, effectively returning to taxpayers some of the profits it was able to milk from EpiPen price increases.
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To be sure, the practice was once considered legal under the Hatch-Waxman Act, which controls drug pricing and patents. George Slover, senior policy counsel at Consumer Union, noted in an interview that the act contained loopholes that allowed large pharma companies to delay the entry of competitive drugs to market. But the Supreme Court closed those loopholes in June 2013, with a 5-3 opinion in the Federal Trade Commission vs. Actavis.
"Brand name drug makers have figured out ways to game the system so they essentially buy off the generic makers," Slover said.
It's important to note that Mylan is not under investigation by the FTC at present, but if the agency decides to open an investigation "they could be blocked from continuing to block competition," Slover said. "The contracts that they've got with the schools could be invalidated. There are other remedial actions that the FTC could get the court to order or could get Mylan to agree to."
"Most courts since [the Hatch-Waxman Act] then have looked at these pay for delay claims have concluded that these are illegal," Andy Klevorn, antitrust lawyer at Katten Muchin Roseman LLP said in an interview. "If Mylan did engage in a scheme, they are subject to an investigation."
According to Slover, there are indications that Mylan could have been engaging in these practices with Teva.
In 2012, Mylan and Teva reached a settlement over a patent dispute, although there was no indication from either company that Mylan had paid Teva to delay its generic drug. Whether or not it received payment, Teva agreed to keep a generic off the market until mid-2015.
Better question now circulating and information being requested is "Did Mylan pay TEVA to keep a generic epipen off the market?"
Yep, but they are the federal government so nothing will be done to them. They will probably get more $$$!
Teva is prepared to enter the type 2 diabetes market in 2017 as well, with a generic form of Byetta.
Teva was likely the first applicant to file an Abbreviated New Drug Application (ANDA) for Byetta, which is currently produced by AstraZeneca ( AZN) . Thanks to this status, Teva will enjoy 180 days of generic exclusivity after it goes to market with its Byetta generic.
In June the two companies reached a settlement over AstraZeneca's patent that would allow Teva to begin selling the drug on Oct. 15, 2017 or earlier under certain circumstances.
Antares Pharma ( ATRS) is set to benefit from this move, as it supplies the multidose pen Teva uses for the drug.
What a lot of people are missing for the next lift to ATRS is the generic Byetta. This is right around the corner and for a certain subset as early in the first half of 2017.
By September the 9th. That's the date the FDA is required to respond to theHouse Energy and Commerce Committee. The FDA is supposed th release the problems with the generic alternatives filed.