“I am running a business. I am a for-profit business. I am not hiding from that.”
That was Mylan CEO, Heather Bresch’s recent reaction to the EpiPen cost controversy.
And as heartless as that may sound, she’s right.
Mylan’s EpiPen essentially has no competition, and that’s why the company has been able to continuously raise prices. Over nine years a two-pack of life-saving EpiPens exploded 545% to $600.
To the 3.6 million Americans with allergies, a shot of epinephrine can be the difference between life and death. A simple dose of the drug, known as adrenaline helps fight the anaphylactic shock that an allergy can trigger. That’s why portable EpiPens are essential to them.
Since anaphylaxis can be so deadly, the American Academy of Pediatrics (AAP) has recommended that children with food allergies, for example, carry two auto-injectors at all times.
At $600 for two, that very cost of staying alive is extremely high.
Unfortunately, it all comes down to making money for big business.
EpiPen revenue exceeds $1 billion and provides up to 40% of Mylan’s operating profits.
But after being hit with waves of criticism, Mylan is backing away from its stance and will start selling a cheaper, generic version of the EpiPen. In fact, the company just announced that it will launch a generic version within weeks that is identical to the branded option with a $300 price for a two-pack, available in 0.15-milligram and 0.30-milligram strengths, like the current versions.
The Company has wisely realized that the bad press could cause it to lose a big chunk of its market share if and when the FDA approves competitive products.
And Mylan’s generic EpiPen may not be the only EpiPen product to hit the market over the next few months.
Two companies to watch are Teva Pharmaceuticals (TEVA) and Antares Pharma (ATRS), which will provide epinephrine pens to TEVA in a multi-product deal.
While the FDA delayed TEVA’s generic version of the EpiPen over “certain major deficiencies” earlier this year, the company is reportedly filing an Abbreviated New Drug Application (ANDA) to bring its product to market.
(Just to note, the ANDA is referred to as “Abbreviated” because the company is not required to include any pre-clinical or clinical data to establish safety and effectiveness of product. Instead, the generic version, according to the U.S. FDA must simply demonstrate the product performs as a bioequivalent.)
Once the ANDA is filed, FDA approval of the generic could bring it to market as early as 2017.
Another potential competitor is Impax Laboratories (IPXL), which offers a lower cost epinephrine with a product called Adrenaclick. This one provides the same medication at the same doses as Mylan’s EpiPen. The only difference is that an EpiPen has one cap that needs to be removed. Adrenaclicks have two.
A fourth company to watch is Adamis Pharmaceuticals Corporation (ADMP), which is attempting to bring its generic pre-filled epinephrine syringes to market. The FDA rejected the product early this year, demanding that the company expand its patient usability study and product stress testing. However, Adamis Pharmaceuticals is likely to resubmit its New Drug Application (NDA) by year end.
All this potential EpiPen competition could be great news for the more than 3.6 million U.S. allergy patients and shareholders in any of those stocks that gain FDA approval for their EpiPen-like product.