Litigation Details for In Re: MYLAN N.V. SECURITIES LITIGATION (S.D.N.Y. 2016)

In Re: MYLAN N.V. SECURITIES LITIGATION (S.D.N.Y. 2016)

Docket		Date Filed	2016-10-11
Court	District Court, S.D. New York	Date Terminated	2023-03-31
Cause	15:78m(a) Securities Exchange Act	Assigned To	James Paul Oetken
Jury Demand	Plaintiff	Referred To
Patents	7,449,012; 7,794,432; 8,048,035; 8,870,827; 9,586,010
Link to Docket	External link to docket

Details for In Re: MYLAN N.V. SECURITIES LITIGATION (S.D.N.Y. 2016)

Date Filed	Document No.	Description	Snippet	Link To Document
2016-10-11				External link to document
2016-10-11	103	Answer to Amended Complaint	that U.S. Patent Numbers 7,449,012, 7,794,432, 8,048,035 and 8,870,827 each have a patent expiration…Technologies Inc. is the assignee to U.S. Patents Nos. 7,449,012, 7,794,432, 8,048,035, 8,870,827 and 9,…Technologies, Inc. is the assignee for U.S. Patent Numbers 7,449,012, 7,794,432, 8,048,035 and 8,870,827, and…095,664, filed Apr. 1, 2005, now U.S. Pat. No. 7,449,012, which claims the benefit of U.S. Provisional …information, U.S. Patent Number 4,031,893 was filed on May 14, 1976, that U.S. Patent Number 4,031,893	External link to document
2016-10-11	114	Amended Complaint	expiration of U.S. Patent Nos. 7,449,012 B2 (the “‘012 patent”) and 7,794,432 B2 (the “‘432 patent”), which expire…Numbers 7,449,012, 7,794,432, 8,048,035, and 8,870,827 (the “EpiPen Patents”). These four patents have a …additional patents for features that were subsequently integrated into the EpiPen: U.S. Patent Numbers…The issuance of the EpiPen Patents, and Mylan’s designation of these patents as covering the EpiPen, …submitted information concerning the ’012 patent and ’432 patent for listing in the FDA’s [Orange Book	External link to document
2016-10-11	123	Third Amended Complaint	expiration of U.S. Patent Nos. 7,449,012 B2 (the “‘012 patent”) and 7,794,432 B2 (the “‘432 patent”), which expire…Numbers 7,449,012, 7,794,432, 8,048,035, and 8,870,827 (the “EpiPen Patents”). These four patents have a …additional patents for features that were subsequently integrated into the EpiPen: U.S. Patent Numbers…The issuance of the EpiPen Patents, and Mylan’s designation of these patents as covering the EpiPen, …submitted information concerning the ’012 patent and ’432 patent for listing in the FDA’s [Orange Book	External link to document
2016-10-11	144	Answer to Amended Complaint	that U.S. Patent Numbers 7,449,012; 7,794,432; 8,048,035 and 8,870,827 each have a patent expiration…Technologies Inc. is the assignee to U.S. Patent Nos. 7,449,012; 7,794,432; 8,048,035; 8,870,827; and 9,…Technologies, Inc. is the assignee for U.S. Patent Numbers 7,449,012; 7,794,432; 8,048,035 and 8,870,827, and…095,664, filed Apr. 1, 2005, now U.S. Pat. No. 7,449,012, which claims the benefit of U.S. Provisional …information, U.S. Patent Number 4,031,893 was filed on May 14, 1976, that U.S. Patent Number 4,031,893	External link to document

In Re: MYLAN N.V. SECURITIES LITIGATION: A Comprehensive Analysis

Background of the Case

The In Re: MYLAN N.V. SECURITIES LITIGATION (Case No. 1:16-cv-07926) is a securities fraud class action lawsuit filed against Mylan N.V., a global pharmaceutical company, and several of its current and former officers. The lawsuit alleges that Mylan engaged in various illegal practices, including the misclassification of its EpiPen product under the Medicaid Drug Rebate Program (MDRP), and failed to disclose these practices to investors, thereby misleading them about the company's financial health[1][4].

Allegations of Securities Fraud

The plaintiffs, a group of investors who purchased Mylan N.V. or Mylan Inc. common stock between February 21, 2012, and May 24, 2019, claim that Mylan's actions constituted securities fraud under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The key allegations include:

• Misclassification of EpiPen: Mylan allegedly misclassified the EpiPen as a generic drug under the MDRP, which allowed the company to pay lower rebates to Medicaid, reducing its financial liabilities significantly[1][3].
• Misleading Statements: Mylan executives made statements about the company's income and the competitive nature of the pharmaceutical market that were misleading in light of the undisclosed misclassification. These statements painted an inaccurate picture of the company’s financial health[1][4].

Court’s Analysis of Securities Fraud Claims

The court examined whether Mylan's actions met the criteria for securities fraud, which includes material misrepresentations or omissions, scienter (a wrongful state of mind), and direct causation of economic losses to the plaintiffs.

• Material Misrepresentations: The court found that Mylan’s descriptions of the market as "highly competitive" and its statements about the sources of its income could have misled investors. These statements, combined with the undisclosed Medicaid misclassification, were deemed materially misleading[1].
• Scienter: The court determined that the plaintiffs had sufficiently alleged that Mylan’s executives acted with the requisite scienter, given their awareness of the misclassification and the associated risks[1][4].

Misrepresentation of Medicaid Rebates

A critical aspect of the case was Mylan's reporting of rebate rates for the EpiPen under the MDRP. The plaintiffs alleged that Mylan’s failure to properly classify the EpiPen and its subsequent reporting of lower rebate rates allowed the company to save over $700 million. This misrepresentation was not disclosed to investors, leading them to believe that Mylan's financial performance was stronger than it actually was[1][3].

Settlement with the SEC and DOJ

Mylan's actions also led to significant regulatory repercussions. The company settled with the Securities and Exchange Commission (SEC) for $30 million due to disclosure and accounting failures related to the EpiPen. Additionally, Mylan agreed to pay $465 million to resolve allegations with the Department of Justice (DOJ) that it had violated the False Claims Act by knowingly misclassifying the EpiPen[3].

Court's Ruling

The court ultimately decided to allow the securities fraud claims against Mylan to proceed. It found that the plaintiffs had sufficiently alleged that Mylan’s misclassification of the EpiPen under Medicaid, along with the company’s misleading statements to investors, could constitute a violation of securities laws. The court denied Mylan's motion to dismiss, allowing the case to move forward to further litigation[1].

Additional Allegations and Claims

The lawsuit also includes other allegations against Mylan, such as:

• Antitrust Violations: Plaintiffs claim that Mylan engaged in anticompetitive agreements related to the EpiPen, which were allegedly illegal under the Sherman Act. However, the court has previously dismissed some of these generic drug allegations for failing to meet the required evidentiary standards[4].
• Market Allocation and Price-Fixing: Plaintiffs argue that Mylan was involved in market allocation or price-fixing conspiracies involving numerous generic drugs. These claims are still under scrutiny and require the plaintiffs to meet a high evidentiary burden[4].

Class Action Notice

The case involves a class action notice to all purchasers and acquirers of Mylan N.V. or Mylan Inc. common stock during the specified period, informing them of their potential rights and the ongoing litigation[2].

Key Takeaways

• Misclassification and Misleading Statements: Mylan's misclassification of the EpiPen and subsequent misleading statements to investors are central to the securities fraud allegations.
• Regulatory Consequences: Mylan faced significant settlements with both the SEC and DOJ due to its actions.
• Ongoing Litigation: The case has been allowed to proceed, with the court denying Mylan's motion to dismiss.
• Evidentiary Burden: Plaintiffs must meet a high evidentiary burden to prove their claims, including demonstrating scienter and material misrepresentations.

FAQs

What is the main allegation against Mylan in the securities litigation?

The main allegation is that Mylan misclassified the EpiPen as a generic drug under the Medicaid Drug Rebate Program, leading to lower rebate payments and misleading financial statements to investors.

How much did Mylan agree to pay in the settlement with the DOJ?

Mylan agreed to pay $465 million to resolve allegations with the DOJ that it had violated the False Claims Act by knowingly misclassifying the EpiPen[3].

What is the significance of the SEC settlement in this case?

The SEC settlement highlights Mylan's failure to disclose and accrue for the loss relating to the DOJ investigation, resulting in false and misleading public filings[3].

What other allegations are included in the lawsuit against Mylan?

In addition to the misclassification and misleading statements, the lawsuit includes allegations of antitrust violations and market allocation or price-fixing conspiracies involving generic drugs[4].

Who is included in the class action notice for this litigation?

The class action notice applies to all purchasers and acquirers of Mylan N.V. or Mylan Inc. common stock during the period from February 21, 2012, through and including May 24, 2019[2].

Sources

1. Whitcomb Law PC: Mylan Securities Fraud Claims Over Medicaid Misclassification[1].
2. PR Newswire: Summary Notice of Pendency of Class Action for All Purchasers and Acquirers of Mylan N.V. or Mylan Inc. Common Stock[2].
3. Baker Donelson: Recent Pharmaceutical Company Settlement with SEC Illustrates Various Risks Related to Disclosure Obligations of Reporting Companies[3].
4. Casetext: In re Mylan N.V. Sec. Litig., 666 F. Supp. 3d 266[4].
5. Justia: In Re: MYLAN N.V. SECURITIES LITIGATION, No. 1:2016cv07926[5].