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Mylan launching cheaper, generic version of EpiPen allergy injector

| Monday, Aug. 29, 2016, 8:45 a.m.
In this July 8, 2016, file photo, a pharmacist holds a package of EpiPens epinephrine auto-injector, a Mylan product, in Sacramento, Calif. Mylan said it will make available a generic version of its EpiPen, as criticism mounts over the price of its injectable medicine.
In this July 8, 2016, file photo, a pharmacist holds a package of EpiPens epinephrine auto-injector, a Mylan product, in Sacramento, Calif. Mylan said it will make available a generic version of its EpiPen, as criticism mounts over the price of its injectable medicine.

Mylan NV said it will offer a generic equivalent of its EpiPen emergency allergy injection at half the price in “several weeks,” but its latest effort to quell mounting criticism over the high cost of the lifesaving device failed to appease some critics who questioned whether the move protected the company's market dominance.

It is unusual for a pharmaceutical company to offer a generic version of its own brand-name drug product before protections that allow it exclusivity in the market expire. A competing generic from Teva Pharmaceutical Industries, an Israel-based rival, has failed to receive approval from U.S. regulators.

Mylan, which is based in the Netherlands but run from offices in Cecil, said Monday that its generic EpiPen would be sold at $300 for a two-pack. The roll-out of the generic device is Mylan's latest response to accusations that the company has been price gouging patients on a product whose cost has soared more than 500 percent since the company acquired the rights to EpiPen in 2007.

Consumer advocates and lawmakers called the announcement a public relations move and continued to raise antitrust concerns because of Mylan's near monopoly of EpiPen, which is an injector prefilled with a small dose of epinephrine, a drug used to stop potentially fatal allergic reactions to insect bites and stings, and to foods such as nuts and eggs.

And while offering a cheaper generic EpiPen will cut into Mylan's revenue, some analysts said it could extend the company's leading position in the market for the allergy treatment by allowing it to have a branded product and a generic copy before a rival from another pharmaceutical company comes to market.

Some critics said the company's generic price was still expensive.

Some lawmakers have called for congressional hearings on Mylan's pricing, an investigation by the Federal Trade Commission and action by the Food and Drug Administration to increase competition by speeding up approvals of any rival products.

Mylan CEO Heather Bresch has blamed pharmacy managers, health insurers and a broken U.S. health care system for the soaring prices.

Mylan charges $274 for the EpiPen twin-pack, but middlemen tack on charges that boost the list price to $608. Company spokeswoman Nina Devlin declined to say how much Mylan would charge for the generic EpiPen before the mark-ups by pharmacy benefit managers and other middlemen.

In a statement Monday, Bresch acknowledged the “deep frustration and concerns” over the price hikes and blamed an opaque system of drug pricing in which the middlemen caused astronomical spikes. She has received criticism for shifting blame to others and not cutting the price for EpiPen.

There is no guarantee that reducing the cost of EpiPen would flow through to patients because of the system for pricing and selling brand-name drugs to patients — which is why Mylan introduced a generic rather than just lowering EpiPen's price, she said.

“(B)ecause 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, we determined that bypassing the brand system in this case and offering an additional alternative was the best option,” Bresch said.

Many critics renewed calls for congressional action.

Sen. Bernie Sanders, a Vermont independent, took to Twitter, saying that the generic versions would still cost three times more than EpiPens did in 2007.

“This isn't a discount. It's a PR move,” the senator tweeted.

Sen. Richard Blumenthal, D-Conn., said Mylan's announcement raised as many questions as solutions, including why the price was still so high and whether its action was a “pre-emptive strike against a competing generic.”

“Investigations are still vitally necessary into possible antitrust lawbreaking, and I will press for Senate hearings as well as FTC subpoenas,” Blumenthal said.

Reps. Jason Chaffetz, R-Utah, and Elijah E. Cummings, D-Md., heads of the House Committee on Oversight and Government Reform, wrote to Bresch on Monday, requesting documents and communications regarding Mylan's revenues from EpiPens since 2007, manufacturing costs and how much the company receives from federal health care programs.

The FTC and Justice Department did not return requests seeking comment about antitrust concerns.

Some analysts have estimated that the tiny amount of epinephrine in an EpiPen is worth barely $1, and the auto-injectors might cost as little as $5.

The generic EpiPen will be essentially the same product as the branded version, but its costs will be lower because it will go through a different supply chain, Devlin said. Pharmacy benefit managers who manage prescription benefit programs for companies get a bigger markup on branded drugs, which often include rebates from manufacturers. Generics don't go through the same complex rebate system that make branded drugs even more expensive.

Mylan's move still doesn't address the underlying issues that are driving up drug prices, including exclusive marketing rights and issues of transparency in pricing, said Stephen Foreman, an associate professor of health care administration at Robert Morris University.

“What we've done is give them a monopoly, and they're using it, and that's a problem,” Foreman said.

Last week, Mylan said it was expanding programs that help some people pay for EpiPens. It doubled the limit for eligibility for its patient assistance program, so a family of four making up to $97,200 would pay nothing out of pocket. It said it will offer $300 discount cards, up from the current $100 per-prescription savings, to help with co-pays.

Mylan's announcement Monday comes a few days after the compounding pharmacy Imprimis Pharmaceuticals said it might be able to sell a version of the allergy treatment in a few months and likely would charge about $100 for two injectors.

The introduction of a generic EpiPen will cut into Mylan's sales, with the revenue it collects per injector prescription declining as much as 25 percent, said Ronny Gal, senior analyst at Sanford C. Bernstein & Co. But it also could position the company “as the go-to generic option in the epinephrine auto injector space — potentially a smarter big-picture move,” said Elliot Wilbur, an analyst at Raymond James.

Chris Fleisher is a Tribune-Review staff writer. Reach him at 412-320-7854 or cfleisher@tribweb.com. The Associated Press contributed.

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