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New York attorney general launches antitrust probe of Mylan's EpiPen contracts

New York Attorney General Eric Schneiderman
Getty Images
New York Attorney General Eric Schneiderman

School's back in session — and Mylan could be headed to the principal's office.

New York state's attorney general on Tuesday opened an investigation into the pharmaceuticals giant, focused on its contracts with local school systems to buy its lifesaving EpiPens.

The skyrocketing price of those auto-injection devices, used to counteract potentially fatal allergic reactions, has drawn intense criticism of the company this summer.

Mylan NV EpiPen 2-Pak medication
George Frey | Bloomberg | Getty Images
Mylan NV EpiPen 2-Pak medication

The office of Attorney General Eric Schneiderman said it launched its probe after a preliminary review revealed Mylan might have inserted anti-competitive terms into its deals to sell EpiPens.

Schneiderman's move came within hours of U.S. Sens. Richard Blumenthal, D-Conn., and Amy Klobuchar, D-Minn., asking the Federal Trade Commission to investigate whether Mylan violated federal antitrust laws to protect EpiPens from competition.

"As the cost of EpiPens skyrocketed, schools seeking relief turned to Mylan's 'EpiPen4Schools' program, which offered a significant discount for the lifesaving drug," Blumenthal's office said in a statement.

"Some of these schools were required to sign a contract agreeing not to purchase any products from Mylan's competitors for a period of 12 months — conduct that can violate the antitrust laws when taken by a monopolist."

Schneiderman's probe also comes on the heels of news that Minnesota's attorney general, Lori Swanson, has asked Mylan to provide documents that would justify the company having raised the retail price of EpiPens more than 400 percent in recent years, up to more than $600 per two-device pack.

"No child's life should be put at risk because a parent, school, or health-care provider cannot afford a simple, lifesaving device because of a drug-maker's anti-competitive practices," Schneiderman said.

"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," he said.

"Allergy sufferers have enough concerns to worry about — the availability of lifesaving medical treatment should not be one of them. I will bring the full resources of my office to this critical investigation."

Mylan, in an emailed response, said that its EpiPen4Schools program, which has provided more than 700,000 free EpiPens to more than 65,000 participating schools since its inception, "continues to adhere to all applicable laws and regulations."

"There are no purchase requirements for participation in the program, nor have there ever been to receive free EpiPen Auto-Injectors," Mylan said. "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, but such restriction no longer remains. "

Last week, the company said that it would launch a generic version of the EpiPen, for half the price of that branded product.