Drug maker Mylan Pharmaceuticals, under fire from the public and Congress over the soaring price of its anaphylaxis treatment, will launch a generic version of the EpiPen auto-injector at a list price of $300 per two-pack — roughly half the cost of EpiPen, the company announced early Monday morning.
The generic version, which Mylan says will be identical to EpiPen in both design and drug formulation, will hit shelves in “several weeks,” according to a company press release. Like EpiPen, the generic version will come in two strengths. The company will continue to offer expanded discounts to patients who purchase the branded EpiPen.
Mylan CEO Heather Bresch called the move “an extraordinary commercial response” to patient anger and frustration over the rising cost of the EpiPen.
Mylan has been steadily hiking the price of the epinephrine auto-injector once or twice a year, but Bresch has blamed the recent uproar on other players in the supply chain, including pharmacy benefits managers and the insurance industry. In an interview last week on CNBC, she called the system “broken,” noting that many patients are forced to pay more for drugs because their premiums and deductibles have jumped.
Bresch repeated that argument on Monday, saying that Mylan had determined that simply cutting the cost of the EpiPen wouldn’t be the most effective response “because of the complexity and opaqueness of today’s branded pharmaceutical supply chain and the increased shifting of costs to patients as a result of high-deductible health plans.”
Ronny Gal, an analyst at Bernstein, thinks it’s a smart play. He figures Mylan will make about 25 percent less revenue per prescription with generic EpiPen, but it could be a worthwhile trade-off. “We expect the company will get some credit for the sharp moves,” Gal wrote, “not absolution, but some recognition they responded.” Bresch’s goal has been to shift the focus from drug manufacturers onto payers and insurance companies, and Mylan’s latest gambit could move the needle, according to Gal.
Mylan is largely a generics company; in fact, earlier this year, Bresch was elected chair of the Generic Pharmaceutical Association’s board of directors. But the brand-name EpiPen has been essential to the company’s growth in recent years.
Before last week’s expansion of discount programs, EpiPen was expected to generate nearly $1.5 billion in sales for Mylan this year. That amounts to about 13 percent of Mylan’s revenue, according to Gal.
Bresch, who has called EpiPen her “baby,” has aggressively marketed the product through conventional ads and unbranded campaigns to raise awareness of the dangers of allergic reactions. She’s also spent heavily to lobby Congress for legislation to encourage schools to stock auto-injectors.