he leaders of the Senate Judiciary Committee on Monday asked the Federal Trade Commission to investigate whether Mylan Pharmaceuticals violated antitrust law with a program designed to encourage school districts to purchase the EpiPen emergency allergy device.
As first reported by STAT, the company offered its largest EpiPen discount to school districts only if they agreed to not to purchase any competitive products during the following 12 months.
Antitrust experts noted such an agreement could be illegal if a discount is offered on the condition that a customer must purchase a competitor’s goods. And a company that requires customers to sign such a contract while also dominating the marketplace is generally viewed as anti-competitive. Last year, EpiPen held an 89 percent share of the market for epinephrine auto injectors, according to QuintilesIMS.
“News reports indicate that Mylan entered into contracts with schools that would preclude the schools from purchasing EpiPen competitors,” wrote Senator Chuck Grassley (R-Iowa) and Senator Patrick Leahy (D-Vt.) in a letter to FTC chairwoman Edith Ramirez. “We therefore request that the FTC look into whether Mylan engaged in any anti-competitive practices in violation of the antitrust laws with respect to the EpiPen and, if so, take appropriate action to safeguard patients.”
They are not the first lawmakers to ask the federal government to probe the Mylan school contracts. Following our report last September, Representative Tammy Duckworth (D-Ill.) asked the Department of Justice to investigate Mylan for potentially violating antitrust laws in their sale of discounted EpiPens to schools. And various lawmakers have asked the FTC to probe Mylan over EpiPen pricing.
The school discount program has been widely hailed as a safety net program for children. When President Obama signed the School Access to Emergency Epinephrine Act into law three years ago, the move was billed as a way to “encourage schools to plan for severe asthma attacks and allergic reactions, and provide millions of families with greater peace of mind.”
That reflected an increasing reliance on the device by families nationwide. More than 700,000 free pens have been distributed to schools through the program. Schools have purchased another 45,000 pens at a discount. And laws in at least 11 states require schools to stock epinephrine.
Keeping a stockpile is also incentivized by the federal law. The Department of Health and Human Services provides funding preferences to states for asthma-treatment grants if they maintain an emergency supply of EpiPens, permit trained school personnel to administer the device, and develop a plan for ensuring these trained personnel are available to administer EpiPen during the school day, according to the law.
Mylan has denied violating any laws and noted the exclusivity requirement is no longer part of its discount program, but did not specify when it was removed. One order form signed by a school district last April contained the provision. There are various reasons schools may seek to buy more devices within 12 months, mostly because some devices expire.
In a note sent to us, a Mylan spokeswoman maintained the schools program has been misrepresented. She noted there are no purchasing requirements to participate in the program and that the company offers replacement devices are supplied at no cost.
“Previously, schools who wished to purchase EpiPen Auto-Injectors beyond those they were eligible to receive free under the program could elect to do so at a certain discount level with a limited purchase restriction (however, there was also a discount level with no purchase restriction), but such restriction no longer remain.”
This story was updated to include comments from a Mylan spokeswoman.
Correction: A previous version of this story used incorrect figures for the number of EpiPens schools purchased at a discount. The story incorrectly characterized the EpiPen discount given to schools that signed a contract pledging not to purchase competitive products. The story also incorrectly stated that Mylan removed a schools contract from a website during STAT’s reporting. It was removed earlier.