Senate Dems call for antitrust investigation of EpiPen maker

Senate Dems call for antitrust investigation of EpiPen maker
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Senate Democrats are calling on federal regulators to investigate whether the manufacturer of EpiPen violated antitrust laws when it allegedly required schools to sign noncompete contracts.

In a letter Tuesday, Sens. Richard BlumenthalRichard BlumenthalHoyer not insisting on ObamaCare subsidies in spending bill Airlines promise friendlier skies This week: Congress returns to government shutdown fight MORE (D-Conn.) and Amy KlobucharAmy KlobucharDem labels infrastructure ‘top thing’ Trump can accomplish Wyden pushing to mandate 'basic cybersecurity' for Senate Senators press the FCC on rural broadband affordability MORE (D-Minn.) asked the Federal Trade Commission (FTC) to issue Mylan an administrative subpoena to determine whether the company deliberately engaged in exclusionary practices to hinder its competitors and maintain its monopoly position in the market.

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The lawmakers said there’s a document that seems to confirm press reports that Mylan required schools participating in its “EpiPen4Schools” discount program to sign exclusive contracts stipulating the schools would “not in the next twelve months purchase any products that are competitive to EpiPen Auto-Injectors."

They believe the contracts violate Section 5 of the Federal Trade Commission Act, which bans unfair methods of competition, and possibly Section 2 the Sherman Act, which prohibits attempts to acquire or maintain a monopoly.

Blumenthal and Klobuchar noted that at least 11 states have passed laws requiring schools to keep epinephrine on hand for students who may experience a severe allergic reaction.

“Providing discounts on the condition that the customer not purchase a competitor’s goods is the kind of conduct that can violate the antitrust laws when taken by a monopolist, and in Mylan’s case, this may be a direct violation of Section 5,” they said.

Facing public outcry over the 400 percent price increase of EpiPens since 2009, Mylan announced that it would provide a savings card worth $300 for people paying out-of-pocket for the life-saving injection, effectively reducing Mylan’s current list price of $600 by 50 percent. 

Still, Blumenthal and Klobuchar said the changes do not relieve FTC of its obligation to determine whether the company has violated the law.

“The FTC must investigate whether Mylan has maintained its monopoly position through the use of these exclusive supply contracts, enabling the company to engage in price gouging for EpiPens by blocking rivals from becoming effective competitors,” they said in their letter.