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How a 4X increase in a drug’s price led to a $264 million payout

How a 4X increase in a drug’s price led to a $264 million payout


Viatris Inc., the makers of EpiPens, announced on 28 Feb 2022 that they will be settling a $264 million class action lawsuit over the pricing of their life-saving product.

EpiPen is the brand name for epinephrine autoinjectors– medical devices that provide a life-saving dose of adrenaline to people experiencing severe allergic reactions.

Despite the wide-spread need for this drug, Viatris Inc. gradually raised its list price from $100 in 2007 to over $600 in 2016! The then CEO of Viatris was found to play an integral role in this decision.

The ensuing public outrage led to a $1 billion lawsuit in 2016 that alleged that Viatris Inc. and EpiPen manufacturer Pfizer were monopolising the market for the life-saving medication.

Viatris's callous decision to raise its prices made EpiPens inaccessible for most people. And this isn’t a one-off case in pharma. Many companies make decisions that harm their customers, which often ends in lawsuits.

For this reason, businesses always have a Director’s and Officer’s (D&O) Insurance policy in place. This policy covers a company against any negligence, wrongdoing or misconduct by its top officials during the decision making process.

A D&O policy can help provide for the company’s defence expenses and any damages or settlement it may have to make as a result of the lawsuit.

The lawsuit over EpiPen pricing is set to be resolved by Viatris’s proposed $264 million settlement. Pfizer, which was also named in the lawsuit, had already agreed to pay $345 million last year.

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Further reading

Read more: What does D&O Insurance cover?