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29 Aug 2016

Case Study: Lesson from Mylan’s Epipen Controversy

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Description: Epinephrine autoinjector
An epinephrine autoinjector is a medical device for injecting a measured dose or doses of epinephrine by means of autoinjector technology. It is most often used for the treatment of anaphylaxis.
EpiPens are pen-shaped devices containing a drug that can prevent patients with severe allergies from going into anaphylaxis, an extreme reaction that can cause swelling in the airways, which can lead to unconsciousness or even death (antihistamines are the drugs that treat low-grade allergies like hay fever). The pens contain epinephrine, otherwise known as adrenaline, which relaxes the muscles and opens up the airways, allowing a person to breathe.
Mylan acquired the right to market the EpiPen line of epinephrine autoinjector devices from Merck KGaA as part of their 2007 deal.

Pricing Controversy:
Mylan raised the price from around $100 for a package of two EpiPens in 2007 to around $600 in 2016.
The devices deliver about $1 worth of drug. In 2007 the wholesale price of two EpiPens was about $100, the price was about the same in 2009, by July 2013 the price about $265, in May 2015 it was around $461, and in May 2016 the price rose again to around $609, around a 500% jump from the price in 2009. EpiPen’s price was raised three times since the end of 2014, when a two-pack cost $401.
The last price hike produces widespread outrage. There were widespread social media messages about acquiring the device at a lower cost ($120) from New Zealand.

Mylan’s aggressive promotion to establish the brand EPIPEN:
In the United States, one brand of autoinjector, the EpiPen, manufactured by Mylan, dominates the market. It is 10 years of aggressive promotion which Mylan put into to make a successful brand.
At that time annual sales were around $200M. Heather Bresch, Mylan’s CEO, saw an opportunity to increase sales in the US through marketing and advocacy, and the company launched a marketing campaign to increase awareness of the dangers of anaphylaxis for people with severe allergies that made the “EpiPen” brand as identified with epinephrine autoinjectors as “Kleenex” is for facial tissue; the company also successfully lobbied the FDA to broaden the label to include risk of anaphylaxis and in parallel, successfully lobbied Congress to generate legislation making EpiPens available in public places like defibrillators are, and hired the same people that Medtronic had worked with on defibrillator legislation to do so.

Key contributing factor to establish BRAND EPIPEN in market leadership position:
Mylan’s efforts to gain market dominance were aided when Sanofi’s competing product was recalled in November 2015 and further when Teva’s generic competitor was rejected by the FDA in March 2016.
By the first half of 2015, Mylan had an 85% market share of such devices in the US and in that year sales reached around $1.5B and accounted for 40% of Mylan’s profit.
Since September, rival device Auvi-Q was pulled off the market, and the price of EpiPen has continued to rise. In the last year alone, the price has climbed by $200, Smith said. Emergency medical responders, and even some patients, have turned to manual injections of the medication epinephrine in response, reported Stat News, a dangerous solution in the absence of medical training, doctors say.

Latest update:
Instead, the company took steps to help patients hit with high out-of-pocket costs for EpiPen. Mylan is offering a discount card that will reduce the out-of-pocket payment for patients by up to $300 for an EpiPen two-pack.
Finally to counteract, Drugmaker Mylan annouced on 29th of August, 2016,  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.

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