Mylan N.V. (NASDAQ: MYL) has had a stranglehold on the market for EpiPen, but this is all changing after the U.S. Food and Drug Administration (FDA) approved Teva Pharmaceutical Ltd. (NYSE: TEVA) for a generic version of it.
Mylan had come under fire for hiking its price of the EpiPen in 2016, and CEO Heather Bresch had to justify this in a congressional hearing. However, the company ultimately ended up selling a generic version at a sizable discount.
Mylan won’t be the only company with a generic version of the EpiPen, now that Teva has received FDA approval. This could ultimately lead to a serious pricing war between the two companies.
Teva’s products are the first competitors cleared by the FDA that are direct generic copies of the EpiPen and could be substituted for the brand-name product by a pharmacist.
This approval by the FDA comes at just the right time as it was reported earlier this week that there are concerns about shortages of EpiPens. Mylan President Rajiv Malik commented that EpiPen supply is “inconsistent and inadequate in meeting global demand, including in the U.S. … Supplies will continue to vary from pharmacy to pharmacy and may not always be available.”
Now that there are two generics in the marketplace, it’s time to let the free markets work their magic and consumers might be the beneficiary of lower prices.
Shares of Teva were last seen up over 5% at $23.75, with a consensus analyst price target of $21.09 and a 52-week trading range of $10.85 to $25.14.
Mylan shares traded down 1% at $37.39. The consensus price target is $47.06, and the 52-week range is $29.53 to $47.82.