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After Mylan uproar, a generic EpiPen could hit the market in 2017

While consumers may see some short-term relief with Mylan N.V.’s increased financial assistance for EpiPens, the true price cut could come next year.

Mylan MYL, -1.40% said Thursday that it was doubling eligibility for its patient program, which would defray some of the reported $600 list price, after that price was questioned by consumers, Hillary Clinton and Congress. Buoyed by the outrage, analysts expect the Food and Drug Administration to speed up approval for a generic version, which could be on the market in 2017.

Mylan’s EpiPen, used to treat severe allergic reactions, is essentially the only product on the market right now, with 93% market share and four patents on its EpiPen auto-injector that expire in September 2025, according to Sumant Kulkami, an analyst with Bank of America Merrill Lynch.

The drug’s main competitor, Auvi-Q made by Sanofi SNY, -0.65% was recalled in October 2015.

Still Bernstein analysts say the negative attention currently focused on Mylan may push the FDA to accelerate applications for generic versions of the drug, with most of the hope resting on Teva Pharmaceutical Industries Ltd. TEVA, -0.50%

“We suspect the FDA will be under pressure to enable a more competitive market,” they wrote.

Pharmaceutical giant Mylan has raised the price of the EpiPen more than 400% over the last six years leaving parents shocked and scrambling to buy the injection device for children with life-threatening allergies. National Children’s Hospital Dr. David Stuckus discusses what options there are for consumers.

Teva is expected to submit an application again for its EpiPen Abbreviated New Drug Application, or ANDA, by the end of 2016 and the analysts say that this time the “review of this file may be accelerated and questions of ‘what is close enough’ may be viewed differently.”

Teva received a “complete response” letter from the FDA in February, which generally asks for more information and clarity on the proposed medication, and had previously said that it could launch in mid-2017.

If everything is cleared, the new competitor could be on the market “within days,” Matthew Waterhouse, an analyst at Morningstar, told MarketWatch.

“Generally these generic launches happen very quickly,” Waterhouse said.

In a note Wednesday, Randall Stanicky, an analyst with RBC Capital Markets, said it isn’t clear whether the FDA will speed up approval, and he still believes approval could come in late 2017 or early 2018.

When multiple easy-to-manufacture generic drugs, such as small molecular pills, hit the market, prices can drop more than 90%, Waterhouse said.

But with the EpiPen, which is more complex, Waterhouse believes Teva may be the only generic for years. This could translate to still “significant” savings, he said, but on average, drugs with only one competitor see a price drop of about 30%.

The drug itself isn’t that complex, Waterhouse added, but rather it is the device it’s delivered in.

Additionally Impax Laboratories IPXL, -0.08% which already has a lower cost EpiPen on the market, could take more market share, and even “find help,” the Bernstein analysts say, in expanding its supply.

When a generic does come out, Bernstein analysts expect Mylan to suffer, as consumers switch from the brand.

Insurance companies may move their coverage to the other products as well, the analysts say.

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