By Kerry Young, CQ Roll Call
August 29, 2016 -- Mylan N.V.'s unusual plan to launch a cheaper generic version of its own EpiPen failed to assuage lawmakers, who continue to press for an investigation of price spikes and a lack of competition for the widely prescribed device to treat severe allergic reactions.
Mylan on Monday said it would launch a generic version of the EpiPen with a list price of $300 for a two-pack carton, which the England-based company said is a discount of more than 50 percent from the list price. This cheaper version will be identical to the branded product in terms of both the device used to administer the active medicine in EpiPen, which is epinephrine, and the drug itself, Mylan said. It expects to launch the product in several weeks, pending completion of changes to the label for the drug. The company will also continue to sell EpiPen under that brand name.
"While I appreciate efforts to make the medication more accessible and affordable, today's action illustrates the need for a lasting solution that promotes competition and ensures that people have access to the medications they need at a price they can afford," Sen. Amy Klobuchar, D-Minn., said in a Monday statement.
There's growing bipartisan concern about why Mylan still dominates the market for easily administered epinephrine. Shortly after gaining EpiPen as part of a larger acquisition in 2007, Mylan said in a regulatory filing that the product has been available in the United States since 1980. The Food and Drug Administration on Monday received a letter questioning how it handles generic epinephrine applications from three key Republicans: House Energy and Commerce Chairman Fred Upton of Michigan and chairmen of the panel's health and investigations subcommittees, Joe Pitts and Tim Murphy, both of Pennsylvania. Separately, Sen. Susan Collins, R-Maine, the chair of the Senate Special Committee on Aging, and Sen. Claire McCaskill of Missouri, the panel's ranking Democrat, last week requested a briefing from Mylan staff on the rising costs of the EpiPen.
The Senate Judiciary Committee also is showing a strong interest in EpiPen's cost, which is said to have spiked from about $100 for a two-pack prescription in 2009. Senate Judiciary Chairman Charles E. Grassley, R-Iowa, last week asked Mylan to explain its pricing. He also joined Klobuchar, Sen. Richard Blumenthal, D-Conn., and colleagues in a letter to the FDA questioning the process for considering generic epinephrine. Grassley on Monday said Mylan's plan to introduce its own competing version of EpiPen "sounds like good news but the details are important to know."
"Consumers and Medicare, Medicaid, and insurance companies will want to know how widely available the generic product will be," Grassley said.
Blumenthal on Monday said he would continue to press for Senate hearings and investigative work by the Federal Trade Commission into Mylan. The outrage about the EpiPen also is spurring broad interest in the cost and access to medicines.
"A system in which public outrage is required to address these kind of unjust situations is not efficient," Blumenthal said. "When it comes to affording life-saving products for their families, consumers should not have to depend on the benevolence of monopolists."
Maintaining Profits
Shares of Mylan rose 25 cents, or less than 1 percent, to $43.28 in early afternoon trading Monday, in line with the increase in the Dow Jones Industrial Average.
Elliot Wilbur, an analyst with the research firm Raymond James called the announcement "a bold, out of the box move" that "seems likely to go a long way in terms of reducing the amount of external criticism the company will face." In a note written with colleagues, Wilbur noted Mylan said the company might sell an increased number of epinephrine pens due to the price cut. This is one of the reasons why Mylan's financial results might not be greatly changed by introducing a cheaper rival to its own product, according to the analysts' note.
"Though the optics of this move suggest Mylan will be taking an immediate revenue hit on a key billion dollar product franchise, we believe there is a visible path forward for Mylan to keep profits essentially flat," the Raymond James analysts said in their note.
Political considerations appear to have triggered Mylan's decision to sell a competing version of its own EpiPen, a strategy known as introducing an authorized generic, Barclays PLC analysts Douglas D. Tsao and Morgan Williams said in a Monday note.
"While it's not uncommon to see for brand companies to launch authorized generics just ahead of a generic competition to lock in share of the generic market, we're not aware of a comparable situation in which an authorized generic was launched when generic competition seemed unlikely," Tsao and Williams wrote, referring to Mylan by its stock ticker. "In our view, this move is clearly not driven by competitive considerations but reflects MYL's determination to put this controversy to rest."