By Ankur Banerjee and Ransdell Pierson
(Reuters) - Mylan NV <MYL.O> said it would launch the first generic version of its allergy auto-injector EpiPen for $300, half the price of the branded product, the drugmaker's second step in less than a week to counter the backlash over the product's steep price.
The company reduced the out-of-pocket costs of EpiPen for some patients on Thursday, but kept the list price at about $600, a move that U.S. lawmakers and Presidential candidate Hillary Clinton said was not enough. EpiPen cost about $100 in 2008.
Mylan said on Monday it expected to launch the generic product "in several weeks", an unusual move considering the branded bestseller is still patent protected and major rival treatments have failed to get regulatory clearances.
"Our decision to launch a generic alternative to EpiPen is an extraordinary commercial response," Chief Executive Heather Bresch said Monday. "We determined that bypassing the brand system in this case and offering an additional alternative was the best option."
Mylan's price move failed to squelch criticism of the company's huge price increase for EpiPen since it acquired the product in 2007. The U.S. House Committee on Oversight and Government Reform sent a letter to Mylan's CEO on Monday seeking documents on EpiPen pricing, including those relating to revenue from EpiPen sales since 2007, manufacturing costs, and the amount of money the company receives from federal government health care programs.
And former Democratic presidential hopeful Bernie Sanders tweeted on Monday, "At $300 generic EpiPens will still cost 3 times more than they did in 2007. This isn't a discount. It's a PR move."
Consumer watchdog group Public Citizen said Mylan's latest move was another "convoluted mechanism to avoid plain talk."
EpiPen has a 94 percent market share for auto-injector devices, which jabs a dose of the drug epinephrine into the thigh to counter dangerous allergic reactions such as to peanuts, food allergies and bee stings. The biggest danger is an allergic reaction called anaphylaxis that could cause death if untreated.
Its only U.S. competitor is Adrenaclick, a device sold by Impax Laboratories <IPXL.O> that has not caught on with patients and doctors. The product, which is assembled by hand and is not considered by regulators to be an exact copy of EpiPen, has a list price of more than $400.
Impax spokesman Mark Donohue declined to comment on whether the company would lower Adrenaclick's list price given the planned cheaper price of Mylan's generic
Dr. Howard Selinger, chairman of family medicine at Quinnipiac University, said he has only written two prescriptions for Adrenaclick because it is not much cheaper than EpiPen. Many other doctors do not even know the product's name because of EpiPen's long domination, he said.
Industry analysts said the biggest potential threat to EpiPen is a similar device being developed by rival generic drugmaker Teva Pharmaceutical Industries Ltd <TEVA.TA>.
The U.S. Food and Drug Administration in February declined to approve the product because of dosing problems. But some analysts believe Teva, after fixing the issue, could re-apply for approval and have its product on the market as soon as next year, and win considerable market share.
Sanofi SA <SASY.PA> pulled its own device from the market last year, also on concerns of inaccurate dosage.
Mylan has defended EpiPen's high price, saying it had spent hundreds of millions of dollars to improve the product since acquiring it in 2007.
It has said it recoups less than half the list price as pharmacy benefit managers (PBM), which often require discounted prices or rebates from drugmakers, are involved, along with insurers and others.
Mylan shares were up 0.4 percent at $43.22 on the Nasdaq, amid a moderate upturn for the broader stock market. The stock had fallen 12 percent last week amid a wave of criticism over prices of EpiPen, which generates annual sales of $1 billion.
Bernstein analyst Ronny Gal said though Mylan had "infinite possibilities" to handle the outcry over EpiPen prices, the generic launch was "the big one" and would help PBMs cap their costs.
However, he expects Mylan to still come under fire for its prices and U.S. health regulators to face more pressure to approve competing treatments.
Some lawmakers last week asked the Food and Drug Administration about its approval process for rival treatments.
Leerink Partners said that the generic launch only removed a near-term pricing lever for Mylan as they expect the launch of Teva's version in 2018 to become a pricing headwind.
Mylan is the latest company to be caught up in the growing outrage over drug price increases. Valeant Pharmaceuticals International Inc <VRX.TO> and Turing Pharmaceuticals have both been publicly excoriated for similar price increases.
(Reporting by Ankur Banerjee in Bengaluru, additional reporting by Anya George Tharakan and Diane Bartz in Washington; Editing by Bernard Orr and Andrew Hay)