During the 2016 election, Mylan, a pharmaceutical company, came under fire for their drug pricing practices. The company manufactures, sells, and markets numerous drugs around the world, but they’re mostly known for their production of the EpiPen.
EpiPens are automatic injectors of epinephrine, a substance that prevents users from going into anaphylactic shock. They’re dead simple and convenient to use, and every pharmacy carries them.
Yet EpiPens are costly. Two EpiPens can cost up to $650 total, and the generic versions made by Mylan are around half that cost. If you’re at risk of anaphylactic shock and want to protect yourself, you’re going to have to bear the cost.
Unless, of course, you go to CVS in the near future. The pharmacy chain recently announced that while they would carry EpiPens, they would also carry a less expensive yet equally effective alternative. While the alternate EpiPen isn’t cheap by any means, it’s still a far cry from $650…and it could mean trouble for Mylan.
Mylan bought the rights to sell EpiPens in 2007 from Merck.
EpiPens were sold for years, but when Mylan bought Merck’s generics division, they received the EpiPen rights, too. Mylan subsequently jacked up the price, as they have 85% of the epinephrine autoinjector market share and could get away with doing so. The Department of Justice subsequently forced Mylan to pay $465 million out to EpiPen users and increased their scrutiny of the company’s activities.
In response, alternatives like Impax Laboratories’ Adrenaclick rose in prominence.
The Adrenaclick works just like EpiPen, but requires a different prescription from a doctor to order it instead of the EpiPen. It used to retail at $200 for a two-pack, over $400 cheaper than an EpiPen two-pack.
Now, CVS is selling generic Adrenaclick automatic injectors for $109.99.
This price is applicable to people with and without insurance. If you have a prescription for Adrenaclick and ask for the generic version, you can pay around $200 less than if you got a two-pack of generic EpiPens. This new offer is expected to cut into Mylan’s bottom line, as customers will have less of an incentive to even buy the pricey generic EpiPens now that the competition is widely available and cheaper.
This offer has a positive effect on Impax’s stock price, while Mylan shareholders reacted negatively.
Time will tell just how much this will cut into Mylan’s bottom line. The pharmaceutical company makes countless other drugs and sells them everywhere, so this won’t put them out of business. Yet if more people flock to Adrenaclick than EpiPens and Impax’s percentage of the market share grows, they could stand to lose quite a bit of money.