After a week scrabbling to calm the raging EpiPen pricing crisis, culminating with new copay assistance, Mylan on Monday unveiled its latest tactic. The drugmaker plans to launch an authorized generic that’ll run less than half the cost of the branded med.
Mylan’s generic two-pack epinephrine injection will cost $300, less than half of the original's sticker. It's an “extraordinary commercial response,” CEO Heather Bresch said in a statement. In an analyst note, Bernstein’s Ronny Gal called the launch “meaningful," and he predicted it “will have material impact on the consumer cost of the drug.”
The new product will be available in “several weeks,” Mylan said, but that’s after many families already purchased EpiPens for the upcoming school year.
Mylan could lose about 25% of its revenue per EpiPen script, between the new generic and the copay assistance plans, which offer up to $300 to cover out-of-pocket EpiPen costs, Gal wrote. The company is running the numbers before providing its own estimates, he said.
The company will likely "get some credit" for the generic, but “not absolution," Gal added, following a rush of media coverage and public outrage over continued price hikes for EpiPens since Mylan acquired the product in 2007.
Mylan's #EpiPen price rip-off: pic.twitter.com/iPPXcvGqfD
— FOX Business (@FoxBusiness) August 26, 2016
While the new generic will reduce the burden on families who have to pay cash, the $300 price point will still be three times higher than EpiPen's 2009 cost of $100, according to lawmakers, and will likely raise questions about what was driving the hikes all along.
The company isn't alone, though. A FiercePharma report documented price hikes ranging from 157% to 841% by drugmakers including Jazz, Eli Lilly, Pfizer, Sanofi, Novartis and Teva. The price of Jazz Pharma's Xyrem grew 841% from 2007 to 2014, topping the list, followed by Eli Lilly's Humulin at 354%, Pfizer's Premarin at 257% and Mylan's EpiPen at 222%.
Monday’s announcement follows Mylan’s decision late last week to bolster patient assistance. Thursday, the company announced the $300 in EpiPen out-of-pocket assistance at the pharmacy, saying it would cut in half what certain patients pay. The drugmaker also pledged to raise the income threshold for its patient assistance, a move that would open up help for more patients and "effectively [eliminate] out-of-pocket expense for uninsured and under-insured patients," the company said.
But that strategy didn’t gather much traction. Almost immediately, critics jumped on the company for moves deemed “inadequate and cynical.” Sen. Susan Collins (R-ME) said “a host of questions and concerns remain.” Not least of which was the fact that such assistance is illegal for Medicaid patients.
Nice try @MylanNews but a few token gestures and some happy talk don't justify your #EpiPen price gouging https://t.co/Q6Dy7FfIus
— Steven Rattner (@SteveRattner) August 25, 2016
While EpiPen will have a generic alternative--one that might be adopted by cost-conscious payers--Mylan will still have a virtual hold on the market, which has seen would-be rivals from Sanofi and Teva fall by the wayside in the last year.
That's a point Leerink analysts touched on with a note Monday, saying that in 2015, "we believe that the PBMs were trying to reduce net price for their members by pitting Sanofi's Auvi-Q and Teva's potential generic launch against EpiPen."
But as those products encountered their own hurdles, Mylan was in a position to raise prices. The analysts said PBMs Express Scripts and CVS Health "should be applauded for this effort in our view, not made villains," referencing statements by Mylan to lay some blame on the "opaqueness" of pharma supply chains.
As their probe into the topic continues, senators have asked the FDA to update on potential competitors and whether EpiPen could become an OTC product.
- here's the release
Special Report: 10 big brands keep pumping out big bucks, with a little help from price hikes
Related Articles:
Mylan thought new access plans would quell the EpiPen tempest. It was wrong
In a mad scramble to recover, Mylan rolls out new EpiPen access plan
Mylan CEO summoned by senators for 'urgent briefing' on EpiPen price
Senator calls for investigations into Mylan's 400% EpiPen price increases
All the skinny on Mylan's EpiPen: Price hikes, CEO pay, aggressive ads and more
Pricing trouble ahead for Mylan? Analyst calls recent hikes 'beacons for scrutiny'
FDA swats down Teva's EpiPen copy, putting Mylan in cruise control