Facing public and political anger for steep price hikes on life-saving EpiPens, the device’s manufacturer, Mylan, announced Monday that it will offer a low-cost generic variant. But the generic one is not That cheap.
Since Mylan bought EpiPens in 2007, the company has raised the price from about $50 for a single pen to just over $600 for a two-pack — a cost increase of more than 400 percent. The new generic option, which the company said will be identical to EpiPens and available in a few weeks, is a two-pack with a list price of $300. That’s half the current list price for a pack of two , but still tripling the cost of the devices in 2007.
EpiPens — autoinjectors that deliver a dose of epinephrine to reverse deadly allergic reactions, namely anaphylaxis shock — cost only a few dollars to make and haven’t changed significantly since Mylan bought them. Since the price hikes, Mylan has brought in more than $1 billion in revenue each year. The company’s CEO, Heather Bresch, saw her salary increase by more than 600 percent last year, to $18 million. She is one of the highest paid executives in the industry.
In a press release, Bresch explained the decision to provide a generic drug by saying:
We understand the deep frustration and concern associated with the cost of EpiPen® to the patient and have always shared the public’s desire to ensure that this important product is accessible to all who need it. Our decision to launch a generic alternative to EpiPen® is an extraordinary commercial response, which required the cooperation of our partner [Pfizer]. Due to the complexity and opacity of the current branded drug supply chain and the increased shift of costs to patients as a result of high deductible health insurance plans, we have determined that bypassing the branded system in this case and offering an additional alternative is the best option was .
Ronny Gal, an analyst at Sanford C. Bernstein & Company told the New York Times that the decision to offer a generic product was a “smart (and genuine) move” on Mylan’s part. It’s likely to take the public heat off the company while still making a significant profit on the auto-injectors. Without a price cut on the brand name EpiPens, which doctors can continue to routinely prescribe, Gal estimates that the total revenue per epinephrine autoinjector prescription would still be $280 (or $560 per two-pack).
Prior to offering the generic form, Mylan also expanded access and discounts in their patient assistance programs to try and ease the financial burden on patients.
Although epinephrine as a drug is already a generic drug, the autoinjector is not easy to manufacture. Sanofi, a French-based pharmaceutical company, removed an EpiPens brand competitor last year after dosing issues. No other generic comes close to hitting the market right now.