IPXLE Impax Laboratories (MM)

By Anne Steele and Joseph Walker 

A top U.S. health insurer has dropped its coverage of Mylan NV's brand-name EpiPen and switched to the half-priced version Mylan launched in response to public outrage over its sharp price increases on the lifesaving drug.

Cigna Corp. swapped its coverage of the $600 EpiPen for Mylan's $300 version, according to a document on Cigna's website outlining its prescription drug coverage changes for 2017.

Mylan's launched the cheaper version, which it refers to as a generic, in December. The product is identical to the original -- which has been on the market for nearly 30 years -- but carries the generic name epinephrine instead of the brand name.

"We have revised our covered drug list to encourage use of the generic version as it will deliver more overall value to customers and clients," Cigna spokeswoman Karen Eldred said.

Cigna will also cover a competing drug device made by Impax Laboratories Inc., and allow physicians to choose which product to prescribe, Ms. Eldred said.

Mylan took heat last summer for its price increases on EpiPen -- the list price since 2007 had climbed nearly 550% from about $94, according to data from Truven Health Analytics. EpiPen global sales are estimated to exceed $1 billion annually.

In August, Mylan announced it would launch a cheaper generic in an attempt to quell the furor over its pricing practices. The move also better positioned the company to defend its market share in anticipation of greater market competition, some analysts said.

Kaleo Inc., a privately held drug company in Richmond, Va., plans to relaunch its competitor to EpiPen in the U.S. in the first half of this year. The product, called AUVI-Q, was withdrawn from the market in 2015 after the device was found to potentially deliver inaccurate dosages.

A Mylan spokeswoman said Cigna's move was expected. "These changes were anticipated and are why we anticipate successful generic utilization," she said.

A spokesman for Express Scripts Holding Co., the largest administrator of prescription-drug programs for insurers, said EpiPen continues to be on its list of preferred drugs, and said it is evaluating the generic.

Meanwhile, CVS Health Corp. on Thursday said its pharmacies had begun selling Impax's device, a generic version of Adrenaclick, for a cash price of $109.99 for a two-pack, compared with a $649.99 cash price for EpiPen and $339.99 for the EpiPen generic.

"Cash price" refers to how much pharmacies charge customers who pay for medications themselves rather than through health insurers. However, the lower price is also available to insured customers, CVS said, which could benefit people with high-deductible insurance plans.

Impax, based in Hayward, Calif., also owns the rights to brand-name Adrenaclick, but hasn't sold the product for years, Mark Donohue, an Impax spokesman, said in an interview on Thursday.

Manufacturing problems have hurt sales of the generic version of Adrenaclick in recent years, but Impax has resolved the issues, Impax Chief Executive J. Kevin Buchi said at an investor conference this week. Mr. Buchi said Impax had taken advantage of the EpiPen controversy to improve its market share.

Impax doesn't disclose the product's sales, but Mr. Donohue said the product's market share increased from 4% at the end of 2015 to 10% at the end of last year.

BMO Capital Markets estimates the product's 2016 global sales more than tripled to $96.7 million from $28.3 million in 2015.

CVS spokeswoman Carolyn Castel said the decision to offer the generic Adrenaclick was prompted by what the company was hearing from customers at retail locations and seeing on social media regarding EpiPen pricing.

"This was clearly a pain point for retail customers," she said.

Ms. Castel said CVS will keep carrying EpiPen and the EpiPen generic and work with customers to find the lowest cost option on an individual basis depending on coverage.

CVS Caremark, CVS's pharmacy benefit manager, confirmed its formularies include the EpiPen and Adrenaclick generics as well as the EpiPen branded product.

Shares of Mylan were recently trading down 2% to $36.55.

Write to Anne Steele at Anne.Steele@wsj.com and Joseph Walker at joseph.walker@wsj.com

(END) Dow Jones Newswires

January 12, 2017 16:48 ET (21:48 GMT)

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