Mylan’s EpiPen Recall: Adding Insult To An Injured Product

A newly expanded recall of Mylan NV’s epinephrine auto-injector EpiPen shows that even a company that has long prided itself on supply chain quality is not immune from a high-profile recall due to manufacturing issues.

On March 31, FDA and Mylan announced the US expansion of a recall that was initially limited to several foreign countries. The product is being recalled by Mylan’s contract manufacturer for EpiPen, Meridian Medical Technologies Inc., which is part of Pfizer Inc.

The voluntary action stems from two foreign reports of failure to activate the device due to a potential defect in a supplier component, Mylan said.

“The incidence of the defect is extremely rare, and testing and analysis across the potentially impacted lots has not identified any units with a defect.” – Mylan

“The potential defect could make the device difficult to activate in an emergency (failure to activate or increased forced needed to activate) and have significant health consequences for a patient experiencing a life-threatening allergic reaction,” Mylan said. “Both reports related to the single lot that was previously recalled.”

The initial recall, announced in mid-March, affected one lot of product distributed in Australia, New Zealand, Japan, and certain European countries, Mylan said.

The US recall involves 13 lots of EpiPen and EpiPen Jr. manufactured by Meridian and distributed by Mylan Specialty LP between December 2015 and July 2016. Mylan said the expanded recall is being initiated in the US and will extend to other markets in North and South America, Europe and Asia.

The recall was expanded in consultation with local regulatory authorities, including FDA, to include additional lots “out of an abundance of caution.”

“The incidence of the defect is extremely rare, and testing and analysis across the potentially impacted lots has not identified any units with a defect,” Mylan said.

Black Mark On Mylan’s Record?

Worldwide sales of the branded EpiPen auto-injector totaled approximately $1bn in 2016.

The current recall has become a high-profile event for the company due to scrutiny in the US over EpiPen’s cost and Mylan’s pricing practices. Although EpiPen manufacturing is Meridian’s responsibility, the recall may besmirch Mylan’s own product quality reputation.

Mylan has often emphasized, and defended, its relatively clean manufacturing history. (Also see "Mylan Gets First-Ever GMP Warning Letter" - Pink Sheet, 22 Nov, 2011.)

The company was a driving force behind the first Generic Drug User Fee Act agreement, which sought to bring FDA inspectional parity to foreign and domestic manufacturing facilities. (Also see "Establishment Fees Protect American Manufacturing, Mylan Argues In User Fee Proposal" - Pink Sheet, 20 Dec, 2010.)

Mylan asserted that US-based facilities were at a competitive disadvantage to foreign facilities due to the infrequency of FDA inspections of the latter, and it pushed for “one quality standard” for all products sold in the US. (Also see "GDUFA Implementation Will Be Overseen By Mylan’s Representative in the House" - Pink Sheet, 4 Dec, 2012.)

However, the company has faced some manufacturing challenges of its own in the last few years.

In August 2015, three Mylan facilities in Bangalore, India were the subject of an FDA warning letter citing good manufacturing practice violations. The facilities were part of Mylan’s 2013 acquisition of Agila Specialties Pvt. Ltd. (Also see "Mylan Hit With GMP Warning Letter Despite Quality Improvement Efforts" - Pink Sheet, 18 Aug, 2015.)

In addition to EpiPen, there have been five other US recalls involving products that Mylan and its subsidiaries either manufactured or distributed since 2012, according to data on FDA’s website.

The expanded EpiPen recall is another headache for Mylan just days after the company announced receipt of a complete response letter for a generic version of GlaxoSmithKline PLC’s blockbuster asthma drug Advair (fluticasone/salmeterol). (Also see "Mylan’s Generic Advair Delay Gives Leverage To Rivals" - Pink Sheet, 29 Mar, 2017.)

Mechanical Problems With Auto-Injectors

The mechanical issue underlying the EpiPen recall appears to be somewhat different from the problem that led to the voluntary market withdrawal of Sanofi’s Auvi-Q epinephrine auto-injector in October 2015.

At the time, Sanofi cited an issue with inaccurate dosing delivery. The big pharma subsequently returned the Auvi-Q product rights to kaleo Inc., which launched a retooled version of the product in February 2017 with a controversial pricing strategy. (Also see "EpiPen Rival Heads Back To Market After kaléo Retools With ‘100% Automated’ Production" - Pink Sheet, 20 Jan, 2017.)

Pfizer said “corrective and preventive actions have been implemented” by Meridian.

Mylan acquired the rights to market EpiPen through its 2007 acquisition of Dey Pharma from Merck KGAA.

Meridian is the long-time manufacturer of EpiPen. The company became part of Pfizer through the pharmaceutical giant’s 2011 purchase of King Pharmaceuticals Inc., which had acquired Meridian in 2002.

EpiPen was the source of another recall by Meridian in May 1998. At that time, the manufacturer recalled 47 lots of product distributed in the US and eight other countries due to the potential failure to provide effective doses of medication to treat anaphylaxis.

In a statement to the Pink Sheet on the current recall, Pfizer said patient safety is of primary importance, and “the company is committed to ensuring the safety and quality in the manufacturing and supply of our medicines. The affected lots were manufactured at Meridian Medical Technologies and corrective and preventive actions have been implemented.”

Authorized Generic Unaffected

The recall affects the 0.3mg and 0.15mg strengths (EpiPen and EpiPen Jr., respectively).

Mylan will provide patients affected by the recall with a voucher for a free replacement product redeemable at the pharmacy. The company said it has adequate supply to replace the recalled devices in the US.

The recalled lots do not include Mylan’s authorized generic of the product, which is also manufactured by Meridian.

Mylan launched the authorized generic, which has the same drug formulation and device functionality as the branded product, in December 2016 to counter extensive public criticism about the price hikes it has taken on EpiPen in recent years. (Also see "EpiPen Outrage In Congress Puts Spotlight On FDA Generic Review" - Pink Sheet, 29 Aug, 2016.)

Medicaid Rebate Classification Settlement

The controversy over EpiPen’s pricing has brought with it intensive federal scrutiny in the form of congressional hearings and federal investigations.

In October 2016, Mylan agreed to the terms of a $465m settlement with the Department of Justice and other government agencies related to EpiPen’s classification for purposes of the Medicaid drug rebate program. (Also see "Fast Like EpiPen: Mylan Reaches Quick Settlement Over Medicaid Rebates" - Pink Sheet, 7 Oct, 2016.)

Finalization of the settlement has been a long time coming, but in Mylan's most recent 10-K filing with the Securities and Exchange Commission, the company said the terms of the settlement do not include a finding of wrongdoing on Mylan’s part. The agreement resolves all potential Medicaid rebate liability claims by federal and state governments as to whether EpiPen should have been classified as an innovator drug and subject to a higher rebate formula.

“In connection with the settlement, EpiPen Auto-Injector will begin being classified as an innovator drug on April 1, 2017,” the company said. “Also in connection with the settlement, Mylan expects to enter into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services. Mylan continues to work with the government to finalize the settlement.”

Mylan said it also is cooperating with an SEC subpoena related to its disclosures about the DoJ settlement and EpiPen’s classification under the Medicaid drug rebate program, as well as a Federal Trade Commission inquiry into potential anticompetitive practices in the market for epinephrine auto-injectors.

That's not the end of the company's legal problems. Mylan has been sued by a group of EpiPen purchasers alleging that the company's price hikes constitute conspiracy and fraud. The purchasers are represented by the law firm Hagens Berman, which has also sued insulin manufactures on similar grounds. (Also see "Diabetes Rebate Model Challenged On Morality Grounds In Class Action Suit" - Pink Sheet, 31 Jan, 2017.)

Little wonder then that Mylan has brought in a prominent name to head its defenses, tapping former SEC Commissioner Daniel Gallagher as chief legal officer on March 28. Gallagher, who left the Securities and Exchange Commission in 2015 and was most recently president of the Patomak Global Partners consulting firm, will join Mylan April 17.