Mylan to launch generic EpiPen at half the price of original

“You have to come in under $300”.

Drugmaker Mylan (MYL) said Monday that it will offer a generic version of the life-saving allergy treatment EpiPen for half the list price of the brand name treatment, which had become the center of a national controversy over skyrocketing drug prices.

That’s a 200% increase in price since 2008, rather than a 500% one. “Our decision to launch a generic alternative to EpiPen is an extraordinary commercial response”.

The company will likely “get some credit” for the generic, but “not absolution”, Gal added, following a rush of media coverage and public outrage over continued price hikes for EpiPens since Mylan acquired the product in 2007.

A 2011 study by the Federal Trade Commission found that the first generic to market typically cost 86 percent of the brand-name price when there wasn’t an authorized generic present.

Khan said an insured patient with Mylan-provided savings vouchers contributed about $30 out of pocket for a two-pack of the EpiPens a year ago.

Mylan’s unusual decision to introduce an identical, generic EpiPen competitor follows a week of pressure to lower the price of its lifesaving allergy drug – but some are now questioning whether the move, created to appear as a price-lowering measure, may in fact net Mylan more revenue than the original version.

The new product will be available in “several weeks”, Mylan said, but that’s after many families already purchased EpiPens for the upcoming school year.

Dr. Fatima Khan, Altru Health System allergist/immunologist, said the active agent in an EpiPen, an auto-injector system produced by pharmaceutical company Mylan, is the human stress hormone known as epinephrine. The deep initial discount off the brand-name price could make the market less attractive to generics companies.

The two steps taking by Mylan to reduce the cost of Epipen will have material impact on the consumer cost of the drug.

Intentionally or not, the system is built, however, to effectively subsidize lower drug costs in Europe, where drug prices are limited by the government, something Bresch acknowledges to CNBC.

Mylan indicated in its press release today that before it went ahead with its announcement, it needed to get the approval of its partner, Pfizer, which produces the epinephrine used in the auto-injectors. “Jury is still out”.

Experts note that while drug companies sometimes offer generic versions, it usually occurs “to undercut an outside generic competitor”, the Times reports.

Democratic senator Richard Blumenthal said Mylan may appear to be moving in the right direction, but its latest move raised as many questions as solutions, including why the price is still astronomically high and whether its action is a preemptive strike against a competing generic.

Chief Executive Heather Bresch has defended EpiPen’s high price, saying Mylan had spent hundreds of millions of dollars improving the product, including making the needle invisible, since acquiring it from Germany’s Merck KGaA. The $300 price for the generic roughly puts it back at the price the drug was at in 2013, but it still represents a 200% increase over 2007. At the same time, the company plans to continue selling branded EpiPen – the product makes up nearly 40% of Mylan’s operating profits, with the drugmaker having transformed it from a weak, aging franchise in 2007 to a blockbuster business with a mix of aggressive advertising, product improvements and frequent price increases.