In re: EpiPen ERISA Litigation

Analysis Group was retained on behalf of Express Scripts Inc., a defendant in an ERISA class action lawsuit involving the EpiPen, a prescription treatment for a severe allergic reaction known as anaphylactic shock. The plaintiffs, members of ERISA-governed health care plans, alleged that rebates and fees that Express Scripts and other pharmacy benefit managers (PBMs) negotiated with EpiPen manufacturer Mylan Pharmaceuticals increased their own profits while raising out-of-pocket costs of plan members for EpiPen purchases. The plaintiffs claimed that the PBMs owed fiduciary duties under ERISA to act solely in the interest of plan participants, and violated those duties. They sought to certify a nationwide class comprising all participants in ERISA plans serviced by Express Scripts who had paid either a deductible or coinsurance payment for an EpiPen over a defined period of time.

An Analysis Group team including Managing Principals Aaron Yeater and Jee-Yeon Lehmann, Vice Presidents Federico Mantovanelli and Rebecca Scott, and Manager Tom Beckford supported academic affiliate David Dranove, who filed an expert report. Professor Dranove analyzed factors that influence negotiations between manufacturers, PBMs, and health plans, and opined on how features of plan benefit design affect an individual’s health care spending throughout the plan year. In light of these factors, Professor Dranove demonstrated that the plaintiffs’ experts’ proposed methods for class-wide proof of injury and calculation of any damages were fundamentally flawed.

A judge in the US District Court for the District of Minnesota denied certification of the class, ruling that neither the PBMs’ fiduciary status, nor the alleged breaches of fiduciary duty, nor the alleged injury resulting from these breaches was susceptible of class-wide proof.

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