On Tuesday, New York Attorney General Eric Schneiderman opened an investigation into Mylan NV MYL that focuses on the drugmaker’s contracts with local school districts to purchase its EpiPens.
In a statement, Schneiderman said “No child’s life should be put at risk because a parent, school or health-care provider cannot afford a simple, life-saving device because of a drug-maker’s anticompetitive practices.”
According to Bloomberg, the probe will be broad, but one of the main focus points is whether or not its EpiPens4School program, which offered a significant discount on the drug, locked schools into anti-competitive contracts.
Last month, the pharma leader drew widespread criticism after it was discovered that the company increased the price of EpiPens over 400% over the last several years. To put that in perspective, the drug cost $57 a shot when Mylan acquired it in 2007, and now, a two-pack of EpiPens costs more than $600.
Shortly afterwards, Mylan announced it would take several steps to make the lifesaving allergy treatment more affordable to patients.
Allergan CEO Pledges Limit on Drug Price Increase
Also on Tuesday, healthcare giant Allergan Inc.’s AGN CEO Brett Saunders has offered a promise to limit price hikes on the drugs it sells, writing in a blog post that “I understand the public outcry and add my voice to the condemnation of these behaviors.”
Saunders argues that there is a “long-standing unwritten social contract” between patients, physicians, policy makers, and the greater public, and “Those who have taken aggressive or predatory price increases have violated this social contract!”
While not explicitly naming names, it’s pretty clear he is referring to Martin Shkreli and Turing Pharmaceuticals, Valeant , and Mylan’s recent EpiPen controversy.
Allergan’s pricing pledge is significant, as it opposes the common practice taken by fellow biotech and pharmaceutical companies: raising drug prices two to three times every year. This usually means that drug costs can significantly exceed the annual inflation rate.
“For our industry to remain a vibrant and important part of the healthcare ecosystem, Allergan commits to this social contract and I encourage others to formulate their own self-policing actions,” Saunders continues.
Interested in IPOs? Check out the special edition of Zacks Friday Finish Line, where Editor Maddy Johnson and Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in the second half of 2016.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>