Mylan said it would launch the first generic version of its allergy auto-injector EpiPen at half the price of the branded product, the drugmaker's second step in less than a week to counter a wave of criticism over the product's high price.
The company reduced the out-of-pocket costs of EpiPen for some patients last week, 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" at a list price of $300, an unusual move considering the branded bestseller is still patent protected and major rival treatments have failed to get regulatory clearances.
Chief Executive Heather Bresch has defended EpiPen's high price, saying Mylan had spent hundreds of millions of dollars improving the product, including making the needle invisible, since acquiring it from Germany's Merck KGaA.
Mylan has said that it recoups less than half of EpiPen's list price because pharmacy benefit managers, which often require discounted prices or rebates from drugmakers, are involved, along with insurers and others.
"Our decision to launch a generic alternative to EpiPen is an extraordinary commercial response," Bresch said on Monday. "We determined that bypassing the brand system in this case and offering an additional alternative was the best option."
Mylan's shares were unchanged at $43.03 in morning trading. The stock had fallen 12 percent last week amid the backlash on prices of EpiPen, which dominates the market and generates annual sales of $1 billion.
"While the prior announced discounts were directed at consumers, the current set is directed at payors (PBM)/employers and would effectively cap their costs," Bernstein analyst Ronny Gal said in a client note.
"We suspect Mylan will continue to receive some heat for its price increases and there will be heightened pressure on FDA to bring competition to the market," Gal said.
Some lawmakers last week asked the Food and Drug Administration about its approval process for rival treatments.
The FDA rejected Adamis Pharmaceuticals Corp's rival treatment in June and Teva Pharmaceutical Industries Ltd's generic version earlier this year. Sanofi SA has pulled its device from the market last year on concerns of inaccurate doseage.
Netherlands-based Mylan said on Monday it also intends to continue to market and distribute branded EpiPen.
EpiPen is a preloaded injection of epinephrine (adrenaline) used in case of a dangerous allergic reaction known as anaphylaxis that could cause death if untreated.
Anaphylaxis can occur in as little as a couple of minutes of exposure to the allergen, which can come in the form of food such as peanuts or insects such as bees.
Mylan is the latest company to be caught up in the growing outrage, including from Presidential candidate Hillary Clinton, at apparently egregious drug price increases.
Valeant Pharmaceuticals International Inc and privately held Turing Pharmaceuticals have both been publicly excoriated for similar price increases.