For weeks now, the list price of Mylan’s EpiPen ($600 for a two-pack) has been exhaustively covered by journalists, debated by academics, and skewered by policymakers as an example of the pricing excesses of even generic pharmaceutical companies. Mylan’s latest response to the outrage? Announce that soon, it will be launching a generic EpiPen at a list price of $300 for a two-pack. I and others who study these issues full time cannot understand why Mylan thought this would work to quell the widespread indignation over its pricing practices.
The first red flag came when Mylan stated it would launch the product “in several weeks.” I often find myself defending the FDA against charges that it is too slow to approve new technologies, but let’s face it: it would be shocking news if they were able to approve a new version of anything in just a few weeks. Mylan has not had this in the works for months, so it seems that the new generic product is literally identical to the branded EpiPen – just with a different label. So, essentially, Mylan is preparing to cut the price of its product in half. (Even though that’s still higher than the price was just three years ago, before Mylan began its regular price hikes, and even though this should make us question their justifications for the $600 price.) Great, right? Not so fast.
What reasons (other than public relations) might Mylan have for introducing an authorized generic of this type and how might they attempt to use the two products to maintain their current level of revenues? By bringing the first generic EpiPen to market, Mylan has now planted its flag in the generics space. Although epinephrine (the drug inside the EpiPen) is now generic and cheap to produce and sell, companies do seem to find it difficult to replicate the device portion of the EpiPen, with Sanofi’s product recently removed from the market due to dosing issues and Teva’s application for a generic denied by the FDA with no public explanation just a few months ago. Mylan has now benchmarked a new price for those products if they return – they must price below $300 for a two-pack to compete effectively with Mylan. Continue reading