Why does EpiPen not have a market competitor?  The answer in one acronym:  the FDA.

And the insanity surrounding EpiPen continues to make my head spin.

After Auvi-Q was recalled last year, EpiPen became the king of the hill.  In February 2016, the FDA denied Teva’s generic EpiPen application.  According to FiercePharma “the FDA stiff-armed Adamis’ ($ADMP) prefilled epinephrine syringe, asking for more data.”  Adrenaclick just simply stopped producing brand pens because the market was not there.  No demand meant no manufacturing.   With no competitors to drive prices down, Mylan has expanded EpiPen prices exponentially.   Although EpiPen does not technically have a “monopoly” on the market, we might as well say they do based on a market share of 85%-95% at the end of 2015.

First a little history lesson:

Dey (click link for a timeline provided by Mylan) obtained exclusive rights to EpiPen in 1987.  Fast Forward to 2004 and we see Dey become a part of Merck KGaA.   Mylan acquired EpiPen when it purchased Dey and Merck KGaA generics in 2007.

A company named Meridian Medical Technologies Inc was formed in 1996 when Survival Technology, Inc. (employer of EpiPen auto-injector device inventor Sheldon Kaplan) merged with Brunswick Biomedical Corporation.   King Pharmaceuticals purchased Meridian Medical Technologies Inc. in 2002.  Pfizer acquired King Pharmaceuticals in late 2010.

Confused yet?

And now the connection…

Pfizer Inc.  manufacturers EpiPen (at least partially).   According to Pfizer Inc.’s first quarter revenue statement, EpiPen made Pfizer Inc. $68 Million just in the United States in 2015.  That is $68 Million in the first quarter alone!  And from our history lesson above, we learned how one company can own the rights to the name/marketing/device  while another obtains drug manufacturing control.  Biospace.com makes it all a little easier to understand:  Mylan makes the “device” (the dispensing mechanism) while Pfizer manufacturers the medication administered by the device.

More interesting is that in 2004, King Pharmaceuticals (eventually purchased by Pfizer in 2010) acquired exclusive rights to market and sell EpiPen in Canada. Mylan sub-licenses the name EpiPen to Pfizer Canada.  Which means Pfizer is the sole manufacturer dealing with EpiPen Canada (No wonder the price of EpiPen in Canada hasn’t been affected.  Plus Canadian prices are supervised by a government ran regulatory board) Mylan isn’t even in the picture–except collecting the sub-licensing fees.  Does Mylan still make the device or is that just an American patent law issue?  Or is this part of a bigger partnership?   A little quid pro quo, perhaps.

(It is all so confusing.  I feel like a need an attorney, an investigative journalist, and a magician to make sense of the convoluted paper trail)

In steps Pfizer subsidiary, Greenstone LLC  who made the Adrenaclick generic–note the past tense, MADE.  A search of the Greenstone LLC website, shows that they no longer make generic epinephrine.  When did that happen?  Since it’s the weekend, I can’t confirm dates with Greenstone.  What I do know is that Greenstone LLC was producing a generic epinephrine auto-injector in 2010 prior to Pfizer merging with King Pharmaceuticals.

The Mylan-Pfizer link goes even deeper than EpiPen.  In 2011, Mylan announced “that it [had] entered into an agreement with Pfizer for the exclusive worldwide rights to develop, manufacture and commercialize Pfizer’s generic equivalent to GlaxoSmithKline’s Advair® Diskus and Seretide® Diskus incorporating Pfizer’s proprietary dry powder inhaler delivery platform.”  Advair was one of the top 10 best selling drugs of 2013.  The logical question becomes:  Why would Pfizer afford Mylan this opportunity when Pfizer owns generics manufacturer Greenstone LLC?

For competitors, Mylan and Pfizer sure do seem pretty chummy.   Jeffrey Pfeffer commenting for Fortune.com perhaps said it best: “smaller numbers of competitors makes it easier for companies to cooperate with each other without having to explicitly communicate.”   Harvard Business Review research shows that antitrust authorities have been too lenient in response to pharmaceutical mergers. In this case, it seems as if a merger has lead to a  decrease in competition and ultimately an increase in sales price.

Will partnerships such as these become more frequent?  Is this a legal way around federal antitrust laws designed to ensure fair competition?

What does it all mean?

It means that the government HAD essentially granted an epinephrine “monopoly” (based on market share as noted above), but not to the obviously player.  The missing link is Pfizer.  Pfizer Inc. profited from two out of the three epinephrine auto-injectors on the market in 2010.   Although Twinject was recalled in 2010, Adrenaclick launched.  2013 saw the emergence of a Lineage Pharmaceuticals generic Adrenaclick and Auvi-Q.  The Lineage product barely scrapes the surface of US epinephrine sales, Auvi-Q was recalled in 2015, and Adrenaclick isn’t available.

The debate about drug pricing just got a whole lot more difficult.  Perhaps Pfizer needs brought into the EpiPen pricing discussion.

What do you think?  Am I asking the right questions?  On the right track?


**Updated:  I noticed a few portions that could become confusing and felt as if they needed addressed.  Since the post was published, I updated some wording to make my point clear.