West Virginia accuses Epi-Pen's owner of Medicaid fraud

CHARLESTON, W.Va., Sept. 20 (UPI) -- The state of West Virginia is investigating Mylan, the maker of EpiPen, a life-saving autoinjector used to treat severe allergic reactions, for possible anti-trust violations, including skyrocketing price increases.

Attorney General Patrick Morrisey announced the fraud investigation Tuesday against the company that was founded in his state. Mylan's chief executive, Heather Bresch, is the daughter of West Virginia Sen. Joe Manchin, a Democrat.

The state filed documents in Kanawha Circuit Court to force Mylan to provide documents related to its EpiPen. Morrisey issued Mylan a subpoena on Aug. 26. The company initially agreed to cooperate, but has since failed to respond to the majority of the subpoena.

"I have a statutory responsibility to investigate any potential antitrust violation," Morrisey, a Republican, said in a release. "Consumers lose when competition doesn't flourish. My office owes it to consumers to be their watchdog and turn over every rock to ensure fair play."

The drug maker, which has a manufacturing plant near Morgantown, W.Va., acquired the rights to the drug in 2007, when it cost about $57 and it has since that time raised the price to $500 for a two-pack.

The court filing documents the price increases as well as "failed attempts to introduce an EpiPen competitor, litigation over intellectual property and dominance Mylan has over the epinephrine auto injector market," according to the release.

The subpoena also asks about rebates Mylan paid to participate in the state's Medicaid program.

"The petition suggests such conduct, if proven, could subject Mylan to a potential Medicaid fraud action under state law," according to the release.

The U.S. House Oversight Committee will conduct a hearing Wednesday with executives from Mylan, including Bresch. Doug Throckmorton, deputy director of the Center for Drug Evaluation and Research at the U.S. Food and Drug Administration, also is scheduled to testify as legislators have questioned the agency about delays in approving a generic version of the pen.

Also, New York Attorney General Eric Schneiderman said his office has launched an antitrust investigation into Mylan's contracts with school districts.