Blog Coverage Consumer and Political Pressure Forces Mylan to Lower Cost of Epipen

LONDON, UK / ACCESSWIRE / August 26, 2016 / Active Wall St. blog coverage looks at the headline from Mylan N.V. (NASDAQ: MYL). The company which has been facing tremendous public criticism and political backlash over the price increase for its product EpiPen announced on August, 25, 2016, that it is taking immediate action to enhance access by expanding existing programs to reach out to patients. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/

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Mylan is an American-Dutch global generic and specialty pharmaceuticals company. It supplies its products to over 165 countries and is one of the largest producers of active pharmaceutical ingredients in the world. Its product EpiPen® (epinephrine injection, USP) is an auto-injector which dispenses drug for the emergency treatment of life-threatening allergic reactions.

Background of the backlash and criticism

EpiPen is available in a pack of two and currently costs $600. The same was available for $100 when Mylan had acquired the product as part of the generic drugs division of Merck & Co. in 2007. The price rose 27% in the second quarter of 2016 versus the same quarter in 2015. Parents buying this product for their children have been outraged at the increased prices.

The added pressure on Mylan came in from the political class when Presidential Candidate Hilary Clinton expressed outrage at the increasing cost of the drug. On August 24, 2016, she had pressed Mylan to reduce the price of EpiPen voluntarily, which led Mylan’s shares to take a nosedive. Some members of the Congress have also written to Mylan seeking answers for the increased cost of EpiPen.

Mylan had settled out of court with a competitor manufacturing the generic version of EpiPen in 2015. Since then Mylan has further increased the pace of price rise fearing loss of business.

Mylan’s reaction and action plan

Following the furor, Mylan announced its action plan to alleviate the issue. Firstly, it would enhance access to EpiPen® by expanding existing programs to reach out to patients facing out of pocket expenses. It is issuing savings cards for patients with insurance which will lead to $300 savings on a twin pack of EpiPen, which is a direct 50% savings. Mylan is doubling the eligibility for its patient assistance program. This means that a family of four with up to an annual $97,200 income would not have to pay for the EpiPen. Mylan will also allow patients to order from the company directly thereby saving middlemen costs. And it will continue to give EpiPen for free to select school systems.

Mylan feels that the increased cost of the drug is also due to the failure of the US healthcare system wherein drugs are available at hugely subsidized rates in countries outside the US. Drug prices increase are also due to the amount paid by manufacturers to pharmacy benefit managers, insurers, wholesalers, pharmacy retailers, etc.

Heather Bresch, CEO of Mylan said in a statement:

“We recognize the significant burden on patients from continued, rising insurance premiums and being forced increasingly to pay the full list price for medicines at the pharmacy counter. Price is only one part of the problem that we are addressing with today’s actions. All involved must also take steps to help meaningfully address the U.S. healthcare crisis.”

The twist in the fine print

Even though Mylan has taken immediate action to address the criticism on escalated cost of EpiPen, it has not actually reduced the price. It is just offering discounts to some patients without reducing the price.

Senator Richard Blumenthal, a Democrat from Connecticut, said: “This step seems like a PR fix more than a real remedy, masking an exorbitant and callous price hike. This baby step should be followed by actual robust action.”

Stock Performance

Mylan’s shares have been under pressure recently. The company’s stock was down by 0.70% on August 25, 2016, trading at $42.85 at the closing bell. A total of 17.7 million shares changed hands during the session, which was higher than its 3 months average volume of 4.79 million.

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