EpiPen maker's cheaper version aims to quell furor in U.S.

Mylan's move to offer a cheaper version of its EpiPen in the U.S. is a short-term fix, a Canadian pharmaceutical policy researcher says.

Little ability to push back on drug prices unless there's public uproar, Canadian law professor says

Matthew Herder and his son, Otis, holding an EpiPen to protect against egg allergy. (CBC/Skype)

A move by Mylan Pharmaceuticals to offer a cheaper version of its EpiPen in the U.S. is a short-term fix, a Canadian pharmaceutical policy researcher says.

The drugmaker announced on Monday it will make a version of its EpiPen available in the next several weeks with a list price of $300 US for two devices. The company's current epinephrine auto-injector sells for $600 for a pack of two.

The price of EpiPens have skyrocketed by 400 per cent since 2009, according to the American Medical Association.

The injectors were invented decades ago and are used to treat life-threatening allergic reactions. The syringes come prefilled with the hormone epinephrine. It expires after a year to 18 months.

In Canada, EpiPens are made by the same manufacturer and distributed by Pfizer Canada. The price has hovered around $100 for one device for the past four years and the company says it has no plans to change the price.

"I think in Canada we haven't seen too much of this kind of behaviour as yet, touch wood," said Matthew Herder, a pharmaceutical policy researcher at Dalhousie University in Halifax.

Devil they know

Partly Herder suspects it's because there has been a lot of talk federally about introducing a national Pharmacare program.

 "But companies I think prefer sort of the devil they know and the system as they presently know it, and so if they were to engage in this similar kind of big price change, they might worry that that would help make the case for Pharmacare," Herder said in an interview.

"So I almost wonder because that's a live policy issue in Canada whether that's why we're not seeing these parallel increases. But they're not unheard of."

EpiPen dispenses epinephrine through an injection mechanism to treat life-threatening allergic reactions. ( Joe Raedle/Getty)

Both countries mostly rely on competition to get better prices, he said.

Herder would prefer a system in which the price of a drug was based on its value to consumers, such as how hard the company had to work to develop it and prove it is clinically superior to available treatments.

94% of market share

In the U.S., EpiPen has a 94 per cent market share for auto-injector devices. 

"Our decision to launch a generic alternative to EpiPen is an extraordinary commercial response," Mylan CEO Heather Bresch said Monday. "We determined that bypassing the brand system in this case and offering an additional alternative was the best option."

With the cheaper alternative, Mylan will retain market share against current and future brand-name competitors. 

Despite the price, EpiPen's familiarity, packaging and trade name could make it hard for competitors. 

Generic medicines have the same active ingredient, which Health Canada declares as bio-equivalent, said Helen Stevenson, a former Ontario assistant deputy minister of health.

 

"There are lots of common misperceptions about generic drugs," said Stevenson, now president and CEO of Reformulary Group, a consultant for employer drug plans.

 "We should have a great confidence in generic drugs, they are virtually identical. Parents should be reassured that these drugs are safe and effective." 

Mylan has effectively cornered the market for auto-injectors, say consumers and politicians who accuse the company of price-gouging.

On Monday, U.S. congressmen Jason Chaffetz and Elijah Cummings of the House Committee on Oversight and Government Reform sent a letter to Bresch asking for documents related to the fast-increasing price of EpiPens in the U.S.

"Mylan has worked very hard and some would say in very questionable ways to ensure that it has established relationships that it's acquired for public venues, schools in particular, to have EpiPens on hand," said Herder.

There's currently little competition for EpiPen in the U.S. The only rival product, Adrenaclick, carries a list price of $461 US. At least two companies are trying to get U.S. approval to sell a rival brand or generic version of EpiPen. None is expected to hit the market there until 2017.

Canada's patented drug prices are regulated by the federal Patent Medicine Prices Review Board. 

The problem is the system gives discretion to companies to set prices, particularly when there is only one or two suppliers, Herder said.

"There's very little ability for us to push back as they make a price change unless there's this kind of public uproar."

Herder has an EpiPen for his 11-month-old son, who has an egg allergy.

Bresch defended the price hikes last week, saying the company only received $274 of the total price for a twin-package while insurers, pharmacies and other parties divvy up the rest.

With files from Reuters and The Associated Press

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