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Authorized Generics: Why Mylan Would Compete With Itself in the EpiPen Market

Posted 29 August 2016 | By Zachary Brennan 

Authorized Generics: Why Mylan Would Compete With Itself in the EpiPen Market

As part of an attempt to quell the furor over its more than 400% price increase for its life-saving EpiPen, Mylan announced on Monday that it would soon launch an authorized generic version of its autoinjector for half the price of the brand-name product.

The identical generic two-pack of EpiPens, expected to launch in several weeks, will have a list price of $300, which is half the list price of the brand product, but still significantly more than the price was prior to Mylan’s acquisition of the EpiPen in 2007.

According to Robert Weissman, president of Public Citizen, the profitable price of a pack of two EpiPens in Canada is about $200, while the price in France is half of that.

“The weirdness of a generic drug company offering a generic version of its own branded but off-patent product is a signal that something is wrong,” Weissman wrote.

The decision to launch an authorized generic comes as Mylan has been criticized by senators over the price hikes, and as some senators are calling on FDA to do more to increase EpiPen competition.

Authorized Generics

And though, as Weissman notes, the situation may seem like an odd one, the launch of authorized generics (AGs) are actually commonplace in the pharmaceutical industry as noted in FDA’s list of almost 1,000 currently marketed AGs.

As FDA explains, authorized generics are exactly the same products as their brand name counterparts, with minor differences in labeling, packaging, product code, labeler code, trade name or trade mark.

AGs are sold at a lower cost, and as an alternative, to the brand name drug, though the launch of AGs are meant to allow companies, like Mylan with the EpiPen market, the ability to better control the decline in sales as more generic versions come to market.

The decision to launch an authorized generic for the EpiPen (rather than just slash the price of the brand name product in half) is also a part of that process of controlling what is likely to be a slow decline in EpiPen sales for the Pennsylvania-based company, particularly as FDA in March rejected Teva’s generic version of the EpiPen.

But one of the major differences between generics and AGs is that AGs are brought to market via an existing new drug application (NDA), while generics are brought to market via an abbreviated new drug application (ANDA), meaning AGs can be brought to market much more quickly.

An FDA spokesman explained to Focus: "Authorized generics are covered under the innovator’s New Drug Application and are provided for under a different section of the law than traditional generics. A separate new drug application is not necessary for an authorized generic. Thus the innovator may continue to market the brand name version while also marketing a lower-cost 'generic' version of the innovator drug."

According to the FTC, AGs do not include the brand name or trademark of the brand name drug or manufacturer, but the brand name and AG products are manufactured to the brand’s specifications.

“Generic companies’ willingness to pursue Paragraph IV challenges [alleging a patent in an NDA to be invalid] when they know that they are likely to share exclusivity with other generic companies indicates that AGs have not deterred generic challenges,” FTC notes in a 2009 report on AGs. “Over the longer term, lower expected profits could affect a generic company’s decision to challenge a patent on products with low sales, and one company provided a few examples where it claimed the expectation of an authorized generic led it to reject or delay such a challenge.”

With 254 ANDAs pending FDA approval, 43 of which are potential first-to-file opportunities, Mylan is not a stranger to figuring out ways to maximize its control of markets, particularly as more generic competition looms.


Categories: Regulatory News

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