N.Y. probes EpiPen maker's contracts with schools

New York's attorney general says the company that makes the EpiPen may have inserted anti-competitive clauses into contracts with schools designed to raise prices of the allergy medication even higher.

Contracts allegedly barred schools from buying similar product from Mylan competitors for a year

Mylan has come under criticism for sharp increases in the price of its allergy medication, the EpiPen. (Victor J. Blue/Bloomberg)

New York's attorney general says the company that makes EpiPen may have inserted anti-competitive clauses into contracts with schools designed to raise prices of the allergy medication even higher.

Eric Schneiderman said Tuesday that his office is investigating Mylan Pharmaceuticals, the company that makes EpiPens, which are used to treat extreme allergic reactions and prevent people from going into anaphylactic shock in reaction to things like bee stings, peanut butter and shellfish.

The price of the devices has skyrocketed in the U.S. in the past decade, and they are now six times more expensive than they were in 2007. A two-pack of the booster needles costs more than $600, according to Mylan, which says it is working on developing a generic alternative for about half the price.

Schneiderman said there's evidence the company "may have inserted potentially anti-competitive terms" into sales contracts with schools.

Mylan says it has given 700,000 free EpiPens to over 65,000 schools, but it's alleged the company also attached clauses to those contracts that forbade the schools from buying similar medicines from any of Mylan's competitors for a year.

"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 anti-competitive practices," Schneiderman said in a statement.

"If Mylan engaged in anti-competitive business practices, or violated antitrust laws with the intent and effect of limiting lower cost competition, we will hold them accountable. Allergy sufferers have enough concerns to worry about — the availability of life-saving medical treatment should not be one of them. I will bring the full resources of my office to this critical investigation."

Mylan says it has dropped a previous purchase restriction for schools that wanted more devices at a discount.

"The program continues to adhere to all applicable laws and regulations," Mylan spokeswoman Nina Devlin said. "There are no purchase requirements for participation in the program, nor have there ever been to receive free EpiPen auto-injectors."

Additionally, a New York legislator introduced a bill to authorize pharmacists to dispense little-known and cheaper generic epinephrine auto-injectors under a brand-specific prescription without having to get a new prescription from the doctor.

"Mylan has spent billions of dollars making EpiPen a household name synonymous with epinephrine, but there are lesser known products such as generic Adrenaclick which can be purchased for approximately $140 for a two-pack," said Senate health committee chairman Kemp Hannon, a Long Island Republican. He noted that the essential difference is that the Adrenaclicks injector, by Horsham, Pennsylvania-based Amedra Pharmaceuticals, has two caps instead of one.

With files from The Associated Press and Reuters