Mylan made a somewhat surprising announcement Monday that it would launch a generic version of its EpiPen and sell it for half the list price of its branded product.
The company said it would launch the generic version in several weeks, pending label revisions. So, if the company can launch a generic product in a matter of weeks, where have these generic plans been all along?
Obviously Mylan didn't want to underprice its own branded drug, but it's possible they had filed away plans for a generic version in case a significant competitor arose. Rachel Sachs, an associate professor at Washington University School of Law in St. Louis, points out that Mylan likely drew up generic plans to rival Israel-based Teva Pharmaceutical Industries, which has faced difficulty in gaining approval for a generic epinephrine auto-injector.
“It may well have been on the list of things they were considering, especially when it looked like Teva was going to get approval,” said Sachs, a health law expert. “They probably had some amount of that ready to go, only now in a week of intense media scrutiny did they actually complete that step.”
Although most generic drugs need to go through the Food and Drug Administration's approval process, the FDA's Authorized Generic Drug program allows brand-name drugmakers to make an identical version of their drug as a generic and bypass the regulatory process. While Teva has to jump through hoops to prove that its version of the device is clinically effective, Mylan can begin selling its generic product as soon as possible.
The embattled drug company is also launching a direct-ship program that will allow customers to receive the device straight from the company, bypassing the pharmaceutical supply chain of payers and distributors that Mylan blames for inflating prices. A Mylan spokeswoman said the company is planning to sell the generic product both directly and in retail pharmacies, but didn't respond when asked whether the company would allow customers to use insurance when ordering direct.
Some experts say that insurers may not cover the generic if they're already paying less than what the generic will cost. But Keith Jacobs, CEO of Refillwise, a pharmacy discount card program, said new drugs are often temporarily accepted into a formulary and then coverage is decided against other drugs (like the brand-name) when an annual review comes around.
“I suspect every major insurer will cover it—perhaps even generously during this time of high attention—and then quietly reposition it in years to come, and certainly provide less coverage of the brand version,” Jacobs said.
In its announcement this week, Mylan also mentioned that it is continuing to pressure the federal government and insurers to put the EpiPen on preventive drug lists, a move that has also been supported by allergy advocates. That could potentially eliminate all copays, as the Affordable Care Act requires full coverage of preventive care.
Several experts who have talked to Modern Healthcare about EpiPens say the concept of what's preventive is tricky: If you're going to say an EpiPen prevents a more acute episode or death, then a variety of other things that treat a condition earlier on could be considered “preventive.”
A spokeswoman for America's Health Insurance Plans, the largest insurer lobby, pointed out that gaining preventive status doesn't address the underlying, high price of the EpiPen, and customers would still feel the impact of the full price in higher premiums.
Sachs, the law professor, sees the EpiPen as a therapeutic device treating a symptom, and questions Mylan's efforts to gain preventive status. “A company that's being publicly pilloried for their actions and that increases prices at the rate that they have shouldn't be surprised when we're skeptical of its efforts to turn this into a preventive therapy precisely for this reason,” she said.