Friday 16 October 2015

Mylan's EpiPen: Losing a Billion Dollar a Year Business Because of Trademark Choice and Usage?

In a recent Bloomberg Business article, How Marketing Turned the EpiPen into a Billion Dollar Business, authors Cynthia Koons and Robert Langreth describe how Mylan turned a $200 million a year combination drug and device auto injector of epinephrine—used to help people with emergency allergic reactions to peanuts and other substances—into billion dollar revenues.  Brilliantly, Mylan’s CEO Heather Bresch decided to focus on outreach to parents with children with allergies--along with careful attention to legislation.  After significant marketing—read education—and taking advantage of a substantial increase in allergies in children, Mylan worked with Congress to pass federal legislation “encouraging states to have epinephrine devices on hand in schools.”  According to the article, 47 states now require schools to have epinephrine devices available.  Mylan has given free EpiPens to 59,000 schools and spent 34.2 million on advertising the EpiPen in 2014 alone. Mylan also is working on legislation to require access to epinephrine devices at restaurants, hotels “and anywhere people congregate.”  Mylan also has raised the price of the EpiPen “32% in the last year”—perhaps feeling the pressure coming. 

What is the pressure?  A generic competitor and possibly genericide of the EpiPen mark.  A generic version of the EpiPen may hit the market this year pursuant to a settlement with Teva Pharmaceuticals—well before expiration of several of the patents covering the EpiPen.  Mylan does not appear to be worried.  Bresch stated: “You [will] not see the traditional market loss because of just the brand equity with EpiPen.”  I am not as optimistic because of the potential genericide of the EpiPen mark.  Genericide, and the consequential loss of protection for a mark, occurs when a mark essentially losses its ability to indicate the origin of the source of goods and merely becomes the word for the goods.  For example, marks such as Escalator and Elevator have lost trademark significance because the public came to understand those terms not as trademarks, but as names for classes of goods.  Ordinarily, a trademark for the patented product does not automatically become generic when a patent term ends.  However, it is possible that it might—depending on consumer understanding.  Mylan has a potential problem because of the incredible success of its device and the choice of a relatively non-distinctive mark—using the first three letters of the active drug ingredient coupled with a descriptive word for the appearance of the patented device.  Additionally, the stocking of EpiPens at schools may lead parents to believe that EpiPens are “the” product to be used to treat emergency allergy problems. 

Interestingly, most pharmaceutical related trademarks must not only qualify for trademark protection, but are also regulated by the Food and Drug Administration and other regulatory bodies to ensure that there is not confusion with other pre-existing pharmaceutical related trademarks—particularly with prescribing physicians--and that they do not mislead as to purpose or effect.  Moreover, some case law in the U.S. requires a lower threshold for proving trademark infringement for pharmaceuticals because of the increased danger to human health associated with customer confusion with pharmaceuticals.  Thus, there is essentially a higher level of scrutiny applied to pharmaceutical trademarks which could lead to a court or the US Patent and Trademark Office to lean toward a finding of genericide in a close case.  Notably, the Bloomberg News article stated:  “And for doctors, who write prescriptions for the name they know best, the EpiPen brand “is like Kleenex,” says Robert Wood, a pediatric allergist at Johns Hopkins University School of Medicine.”

Mylan may still have time to work on its trademark issues, but this case study highlights the importance of choice of trademark and monitoring trademark usage by relevant audiences.

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