Generic EpiPen Could Still Be Costly for Families

— -- The pharmaceutical company criticized for increasing the price of the EpiPen announced today that it will create a generic version of the emergency allergy treatment that will cost about $300 for a pack of two injectors and will be available within a few weeks.

Mylan Pharmaceuticals' EpiPen, by far the most popular epinephrine auto-injector on the market, is used to help counteract life-threatening allergic reactions. The company has come under scrutiny in recent weeks after news surfaced that the price of a two-pack EpiPen has soared, rising from approximately $100 in 2009 to around $600 and more today, according to medical literature and various pharmacies nationwide.

"We understand the deep frustration and concerns associated with the cost of EpiPen to the patient, and have always shared the public's desire to ensure that this important product be accessible to anyone who needs it," Mylan CEO Heather Bresch said in a statement today. "Our decision to launch a generic alternative to EpiPen is an extraordinary commercial response, which required the cooperation of our partner. However, because of the complexity and opaqueness of today's branded pharmaceutical supply chain and the increased shifting of costs to patients as a result of high deductible health plans, we determined that bypassing the brand system in this case and offering an additional alternative was the best option."

Here are some key points on the issues around the EpiPen and the planned generic version of it:

Why Would a Company Release a Generic Version of Its Own Drug?

The company's decision to create a generic may seem surprising considering that many drugmakers often seek to protect their brand name drugs from competition in the marketplace. But experts say creating a generic version can be a smart move that allows the company to dominate the market.

To create its own generic, a pharmaceutical company will usually partner with another manufacturer that will produce a generic drug that is virtually indistinguishable from the name brand. Mylan Pharmaceuticals said it would coordinate with a partner on the generic drug.

"It is strategic," generally for a company to produce a generic version of its brand name drug, said Dr. Aaron Kesselheim, an associate professor of medicine at Harvard Medical School and a faculty member in pharmacoepidemiology and pharmacoeconomics at Brigham and Women’s Hospital. "It makes the market look less hospitable for other generic alternatives."

There is currently one generic epinephrine injector on the market. Kesselheim said having two generics available is typically not enough to cause a major fall in prices.

Prices generally "don't drop until there are more than three or four generic competitors," said Kesselheim.

Many Pharmacists Cannot Just Swap Out EpiPen for a Generic

Rejoicing patients should be careful to check in with their doctors about the option of using a generic EpiPen.

Since the EpiPen is both a drug and a medical device (a BX designation by the U.S. Food and Drug Administration,) pharmacists in many states can't simply swap out a name-brand for a cheaper generic in the same manner they will for other medications that are not medical devices. In 29 states, doctors will have to give out new prescriptions specifically for the generic EpiPen.

Generic drugs must have the same active ingredients as name-brand drugs and it’s commonplace for pharmacists to substitute generic medications for name-brand medications for patients, according to doctors.

Generic EpiPen Cost Remains High

While the estimated cost for the generic EpiPen will be approximately half of the name-brand price, it still could be a struggle for families to buy multiple injectors as each pack of two will cost approximately $300. While Mylan has announced different savings programs to help uninsured or under-insured customers gain access to the name-brand drug, it's not clear to what extent these programs will also be available for the generic EpiPen users.

The estimated cost for the only generic epinephrine two-pack auto injector currently on the market, according to GoodRx, ranges between $140 and $379, even with a coupon.

Mylan has not currently released a name for the generic EpiPen expected to be released later this year.

A study published in the Journal of the American Medical Association last week that examined U.S. drug prices found multiple reasons for high drug prices in the U.S. including patents on name-brand drugs and limited negotiating power for the consumer. In foreign countries with nationally regulated health systems, the health system can negotiate a bulk price for medication so that the price is regulated.