Mylan (MYL) Reduces EpiPen Cost After Clinton Comments

Shares of Mylan N.V. (MYL) were trading up +1.45 or +3.36 percent to $44.60 per share in Thursday’s premarket after news that the company reduced the cost of its EpiPen injection for severe allergic reactions. The price reduction was in large part the result of presidential nominee Hillary Clinton calling recent price hikes to the life saving treatment “outrageous”. Mylan N.V. stock closed at $43.15, down -2.47 or -5.41 percent in Wednesday’s regular trading session.

Stock Analysis

Founded in 1961 in West Virginia, Amsterdam, the Netherlands based Mylan N.V.
is the second largest generic and specialty pharmaceutical company in the world and a major producer and supplier of active pharmaceutical ingredients for generic drug products. The company has a portfolio of 1,400 generic pharmaceuticals and markets its products in approximately 145 countries and territories, employing roughly 30,000 people worldwide. Mylan Inc. is a major provider of antiretroviral therapies supplying about 40 percent of HIV/AIDS patients in developing nations.

The EpiPen controversy began when Mylan acquired the EpiPen line of devices from Merck KGaA as part of a 2007 transaction in which Mylan bought Merck’s generics division.
Mylan (MYL) Reduces EpiPen Cost After Clinton Comments
Image by stevepb / Pixabay
The device is an Epinephrine auto injector that delivers approximately $1 worth of epinephrine, but can save lives of people having allergic reactions that could otherwise result in death if not treated immediately.

In 2007, the price of two EpiPens was about $100 and remained unchanged until 2009. By July of 2013, the device was priced at $265. In May of 2016, the price was raised to $461 and one year later reached $609, which brought a barrage of criticism from two senators, the initiation of a Congressional investigation and an accusation of “price gouging”.

On Wednesday afternoon, presidential candidate Hillary Clinton in a tweet said, “EpiPens can be the difference between life and death. There’s no justification for these price hikes.” In a statement calling for Mylan to lower its price on the device, Mrs. Clinton said that recent price hikes of the EpiPen were “outrageous, and just the latest example of a company taking advantage of its consumers.”

She added that, “It’s wrong when drug companies put profits ahead of patients, raising prices without justifying the value behind them”. Clinton made the comments after a bipartisan group of lawmakers asked for an investigation into the price hikes. The request, by Democratic Senator Claire McCaskill and Republican Senator Susan Collins  was for Mylan to provide a briefing for the Senate to explain the price increases.

Mylan responded this morning and said that it would reduce the patient cost of EpiPen through a savings card issued by the company that would cover up to $300 of an EpiPen two pack. According to Mylan, the card effectively reduces the out of pocket expense of the product by 50 percent to patients previously paying the full amount. In addition, Mylan said it was doubling the eligibility for its patient assistance program that will eliminate out of pocket costs for under insured and uninsured patients.

Other News About MYL

Mylan CEO Blamed Obamacare for EpiPen Sticker Shock

CEO Heather Bresch on an earnings call earlier this month said that price hikes to EpiPen were in part due to Obamacare.

How Mylan And Pfizer Could Cause A Major Biotech Backlash

Martin Shkreli, “poster boy for greed” appeared on CNBC to support Mylan’s $600 price tag on EpiPen.

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Published on Aug 25, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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