A cheaper EpiPen
Mylan, the maker of EpiPen, says that a generic version will be identical to the existing product but at half the price of the brand-name item.
In its latest move to quell outrage over its price increases, the maker of the EpiPen has resorted to an unusual tactic — introducing a generic version of its own product.
Mylan said Monday that the generic EpiPen, expected in several weeks, would be identical to the existing product, which is used to treat severe allergic reactions. But it will have a wholesale list price of $300 for a pack of two, half the price of the brand-name EpiPen.
The introduction of the generic is in addition to measures the company announced last week for the branded EpiPen, which will remain in place. Those steps were to increase the financial assistance the company provided to commercially insured patients to help with their out-ofpocket costs and to broaden the eligibility for uninsured patients to receive free products.
Those measures, however, did not stem the furor, in part because the company kept the list price the same. So now, it will essentially sell the same product under two names at two price points, in competition with each other.
The new move could help mollify critics, though some are likely to note that even at $300, the generic would still be triple the price of the EpiPen in 2007, when Mylan acquired the product and began steadily raising its price from around $100 for a pair. Even the generic is expected to provide a nice profit to Mylan because its manufacturing costs are believed to be far less than $300.
Robert Weissman, president of the consumer group Public Citizen, said the new move was not enough.
“The weirdness of a generic drug company offering a generic version of its own branded but offpatent product is a signal that something is wrong,” he said in a statement. “In short, today’s announcement is just one more convoluted mechanism to avoid plain talk, admit to price gouging and just cut the price of EpiPen.”
The move to offer a generic is somewhat unusual. While brand-name drug companies sometimes start selling so-called authorized generic versions of their own products, it is usually to undercut an outside generic competitor. In this case, Mylan faces no immediate generic threat.
So why is it acting? And why did it not announce the move last week with the other measures?
The company suggested in its news release that its action required an agreement from its manufacturing partner, Pfizer. It also has said that merely reducing the list price of the drug would not necessarily lower the prices for patients, because the out-of-pocket costs are set by pharmacy benefit managers and insurers. The generic should mean savings for insurers and federal health programs like Medicare and Medicaid, in addition to some patients.
Mylan has repeatedly pointed to high-deductible health plans, which leave patients with more out-of-pocket costs, as the main reason patients are suddenly noticing higher prices for EpiPens.
Adam J. Fein, president of Pembroke Consulting, said that if Mylan had simply lowered the price it would have risked angering all parties in the distribution network.
Introducing a generic “is a way to do it without making enemies with a bunch of Fortune 25 companies who control your fate,” he said.