North Carolina has reached an $11 million settlement with pharmaceutical company Mylan over allegations that the company used anti-competitive practices to inflate the price of EpiPen auto-injectors, state officials announced.
Attorney General Jeff Jackson said the agreement will return millions of dollars to state-funded healthcare programs that paid elevated prices for the life-saving allergy medication. Under the settlement, North Carolina Medicaid and the State Health Plan will each receive $4.2 million, with the remaining funds allocated as part of the broader resolution.
“They used their control of the market to keep competitors out and drive the price up,” said Attorney General Jeff Jackson. “That’s not legal. We made them pay it back.”
“To have our hardworking state employees and taxpayers across North Carolina be overcharged for a lifesaving drug is unconscionable,” said Treasurer Brad Briner. “Every little bit helps when it comes to funding for our State Health Plan, and efforts like this one keep us on the right track toward controlling healthcare costs for our members.”
The settlement addresses allegations that Mylan, the exclusive U.S. marketer and distributor of EpiPen, engaged in conduct that allowed it to dominate the market and significantly raise prices over time. The cost of a two-pack of EpiPens rose from about $100 in 2007 to roughly $600 by 2016.
State officials alleged that Mylan used a range of tactics to limit competition, including arrangements with pharmacy benefit managers to favor EpiPen over lower-cost alternatives, delaying the entry of generic competitors, and making misleading claims about rival products.
The agreement also resolves claims that Mylan improperly classified EpiPen under the Medicaid Drug Rebate Program, which affected how much the company was required to reimburse government healthcare programs. Additionally, officials alleged that consumers were required to purchase EpiPens in two-packs, even when a single device may have sufficed.
As part of the settlement, Mylan agreed to increase discounts available through co-pay assistance for its authorized generic version of the drug, a move expected to reduce out-of-pocket costs for some patients.
Mylan did not admit wrongdoing as part of the agreement.
The State Health Plan, which covers more than 750,000 public employees, retirees, and their families, reported that more than 10,000 members filled prescriptions for epinephrine auto-injectors in the past year. Officials said the high cost of the medication has been a longstanding concern, particularly given its role in treating severe allergic reactions.
Healthcare advocates and physicians have emphasized that access to affordable epinephrine can be critical, especially for children and individuals with life-threatening allergies.
“People with life-threatening allergies need the medications that will save their lives – and for most people, that’s an auto injector,” said Dr. Austin Lucke, an emergency medicine doctor in eastern North Carolina. “Affordable access to this medication can be lifesaving. The inability to afford it can be fatal, particularly in our most vulnerable, including pediatric populations.”
“Affordable access to medications is the top concern we hear from our community,” said Kenneth Mendez, President and CEO of the Asthma and Allergy Foundation of America. “Whether at the state or federal level, we support reforms that address practices in this system that create artificially high prices. We commend Attorney General Jackson and Treasurer Briner for taking action on behalf of patients and the taxpayers who fund their care.”
The settlement is part of a broader effort by North Carolina officials to address rising prescription drug costs and alleged anti-competitive behavior in the pharmaceutical industry. Earlier this year, the state reached additional settlements with other drug manufacturers over alleged price-fixing involving generic medications.
State officials said they will continue working with other jurisdictions and federal agencies to investigate pricing practices and recover funds tied to alleged overcharges.
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