Mylan NV’s latest attempt to deflect criticism over the price ofallergy shot EpiPen failed to get thedrugmaker out of the sights of Congress.

Last week, Chief Executive Officer Heather Bresch was quick toreact to the mounting political scrutiny over EpiPen’s price hikewith measures to reduce patients’ out-of-pocket costs for theshot’s $600 brand-name version. When that failed to stop criticism, Mylan on Mondayannounced it would introduce a generic EpiPen for $300.

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While Mylan’s response was faster than other drugmakers thathave been criticized for their pricing practices, it wasn’t enoughfor politicians who continue to take aim at the company. After theHouse Committee on Oversight and Government Reform on Mondaydemanded Mylan provide documents to explain how it raised thedrug’s price by at least 400 percent, 20 Democratic senators sent aletter to Bresch on Tuesday expressing their “serious concerns,”blasting the company for offering coupons to help cover thecosts.

“These changes will help some customers who are struggling toafford EpiPens,” wrote the senators, including Elizabeth Warrenfrom Massachusetts and Richard Blumenthal fromConnecticut. “Your discount programs, however, represent awell-defined industry tactic to keep costs high through a complexshell game.”

The senators asked for information on patient use of coupons tobuy EpiPens, saying that when patients receive short-term co-payassistance for expensive drugs, insurance companies, thegovernment, and employers still bear the burden of the excessiveprices -- which in turn leads to higher premiums.

Campaign fodder

The controversy over EpiPens’ price became presidential-campaign fodder afterDemocratic candidate Hillary Clinton called the pricing outrageouslast week. Senator Blumenthal, who’s been among lawmakers callingfor a Federal Trade Commission probe into whether the drugmaker didanything to deny competitors access to the market, said Mondaythat “more must be done -- and more quickly -- to make thelife-saving drug affordable.”

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That sort of critique will likely continue, said Ronny Gal, ananalyst at Sanford C. Bernstein.

“They’re not getting absolved from this,” though thecompany’s concessions may help some, Gal said Monday. “Theirproblem is there’s a broad swath of patients that have to pay forthis. It’s a product used by a lot of mothers for kids.”

Mylan were little changed at $43.26 at 9:52 a.m. in New York.The stock fell 12 percent last week as criticism mounted.

Congressional demands

Mylan has become the latest pharmaceutical company to provokenationwide ire for steep price increases after Martin Shkreli andexecutives from Valeant were called before congressional hearingsthis year. While Mylan’s cheaper generic will appease some of theconcerns, the nationwide debate over EpiPen’s skyrocketing price islikely to go on.

Introducing a so-called authorized generic is a fast way forMylan to get a cheaper version out without actually cutting theprice of the branded EpiPen, which the drugmaker plans to continueto sell. It could increase the company’s stronghold on the marketby capturing part of the market share Mylan would have lost to acompeting generic, and will also influence the price competitorscan charge. As a result, the generic version may not hurt Mylan’ssales much, say analysts who track the stock. AndrewFinkelstein, at Susquehanna Financial Group, predicted the programwould “only modestly” impact revenue.

The drugmaker’s control of the allergy-shot market increased inthe past year as competitors suffered setbacks. In October, Sanofivoluntarily recalled its Auvi-Q injector from the market overconcerns about suspected malfunctions in the U.S. and Canada. Fourmonths later, the Food and Drug Administration identified“major deficiencies” in Teva’s application for ageneric version.

Republican Senator Chuck Grassley of Iowa said Monday thatMylan’s EpiPen generic “sounds like good news,” but he stillexpects the drugmaker to answer questions he sent in a letter lastweek about the price increases. He also continues to look for awritten response from the FDA on the status of any alternatives tothe EpiPen and what might have created delays in introducingthem.

Paying less?

Mylan said measures announced last week, including a $300savings card, remain in place. That raises the question of whetherconsumers will actually pay less for the generic version,said Walid Gellad, who heads the Center for Pharmaceutical Policy andPrescribing at the University of Pittsburgh.

If patients don’t see cost savings, Mylan blame insurers for notlowering out-of-pocket expenses, Gellad said. The company hasalready pinned the blame for high consumer prices on insurers andpharmacy benefits managers.

The EpiPen price increases drew particular attention inWashington because Bresch, the daughter of Democratic Senator JoeManchin of West Virginia, had successfully pushed legislation toencourage use of the EpiPen in schools nationwide. After Mylanbrought the rights to sell the pens in 2007, when they cost about$57 a shot, Bresch’s marketing programs made them a must-have drugfor patients with allergic reactions.

There’s some irony in Mylan’s introduction of a generic EpiPen.In 2006, Bresch, who was then vice president of corporatedevelopment, said that brand-name drugmakers’ practice of sellingunbranded versions of their own medicines was “the singlegreatest threat to the generic industry goingforward.” Mylan’s business model has changed since then, too. Theacquisition of EpiPen the following year shifted the company fromone almost entirely focused on generic drugs to the manager of thebiggest brand-name product in the epinephrine auto-injectorsegment.

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