WEBVTT - Bloomberg's Krutoholow on Mylan To Sell Generic EpiPen (Audio)

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<v Speaker 1>Now on Bloomberg Radio, we take stock of healthcare. The

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<v Speaker 1>issue of drug pricing has been at the forefront, certainly

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<v Speaker 1>in the political realm for the last few months. We're

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<v Speaker 1>living in a very special time in the history of

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<v Speaker 1>the pharmaceutical industry. Let me three percent of all biotechs

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<v Speaker 1>that start actually get a drug approved. It's a very

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<v Speaker 1>hard thing to do. Bloomberg taking sto healthcare and focus

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<v Speaker 1>on Bloomberg Radio. Well, the spotlight is certainly shining hard

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<v Speaker 1>on Land today under fire for pricing it's EpiPen emergency

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<v Speaker 1>allergy shots at six hundred dollars, introducing it's as a

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<v Speaker 1>generic version that will have the price. This is the

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<v Speaker 1>second move in less than a week to respond to

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<v Speaker 1>very intense criticism after its offer of assistance programs to

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<v Speaker 1>help patients cover out of pocket expenses was blasted as

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<v Speaker 1>a mere press relations fixed by several US lawmakers. Joining

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<v Speaker 1>us now for what is going on and what is

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<v Speaker 1>going to happen next for the epipan and certainly for

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<v Speaker 1>mylon as Liz Crudeholo, she's especially pharma and biotech analy

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<v Speaker 1>at Bloomberg Intelligence, joining me here and in New York Studios.

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<v Speaker 1>Lea's welcome back. So for somebody who hasn't been following

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<v Speaker 1>this story, it is. It's just a delicious one. It

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<v Speaker 1>could be an episode on you know, some great Netflix series. Right,

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<v Speaker 1>A big drug company lobbies Congress. The head of the company,

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<v Speaker 1>by the way, the daughter a very powerful congressman. Now, uh,

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<v Speaker 1>and they get it. The schools have to carry these

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<v Speaker 1>EpiPens and the government's gonna help them pay for and

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<v Speaker 1>then she boots the price up. It's sort of a

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<v Speaker 1>genius marketing experiment. So essentially what they've done is they've

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<v Speaker 1>created this idea that if your child has a now

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<v Speaker 1>or do you want EpiPen on you at all times?

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<v Speaker 1>So not only is the parent going to carry the EpiPen,

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<v Speaker 1>but now you also want one in the school, so

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<v Speaker 1>you buy it in this tupac and most schools you

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<v Speaker 1>have to keep the two pack together so that the

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<v Speaker 1>package is labeled, so most patients essentially are going to

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<v Speaker 1>be buying two of these right to two packs. So

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<v Speaker 1>it's a genius marketing experiment in that sense that you've

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<v Speaker 1>got this fear if you don't want to be anywhere

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<v Speaker 1>without your EpiPen. On top of that, they then raised

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<v Speaker 1>the price and a few things allowed them to do that.

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<v Speaker 1>So one is that we have a generic that was

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<v Speaker 1>filed with FDA from Teva. It wasn't approved, that will

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<v Speaker 1>be delayed until seventeen. So now we've got no generic competition.

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<v Speaker 1>Everyone knows EpiPen by name, right, there's this branding quality

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<v Speaker 1>that's the almost think someone like the Google becomes a

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<v Speaker 1>term eppen, what describes this kind of device? You see

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<v Speaker 1>it in TV. People run get an EpiPen, right, It's

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<v Speaker 1>not an EEFN shops epi friend. And so the other

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<v Speaker 1>thing is that they had a somewhat competitor and Snofi's Ovocue,

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<v Speaker 1>and that was recalled last year. So they've had this

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<v Speaker 1>perfect storm where they were able to increase the price,

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<v Speaker 1>which drew all of this scrutiny. At the same time,

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<v Speaker 1>I feel like the story really draws attention to the

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<v Speaker 1>fact that drug companies do not get every single dollar

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<v Speaker 1>of that price increase. So if you look at the

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<v Speaker 1>EpiPen example, there is this middleman situation. So while the

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<v Speaker 1>list price was six eight dollars for to prescription, Mylon

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<v Speaker 1>really only saw two and seventy four dollars of that.

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<v Speaker 1>The rest went to the middleman. So that that really

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<v Speaker 1>brings to light the true situation with our health care

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<v Speaker 1>system and who should be dealing with that is the

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<v Speaker 1>federal government not doing anything about I mean, but I

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<v Speaker 1>guess if I'm a middle man, if I'm a woman

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<v Speaker 1>along that sheen of suppliers, I'm saying, not going to

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<v Speaker 1>make money too, So hey, you grow up, reality, And

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<v Speaker 1>that's the exact situation here. Everybody's saying, well, am I

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<v Speaker 1>supposed to make money off of this? And so the

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<v Speaker 1>decision today was even more genius in terms of or

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<v Speaker 1>you know, a pr situation where they said, look, we

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<v Speaker 1>understand that people are saying, why not lower the price?

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<v Speaker 1>And the decision last week on coupons really only applied

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<v Speaker 1>to people with commercial insurance, so Medicare and Medicaid could

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<v Speaker 1>not benefit from that. So there was a government aspect

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<v Speaker 1>as well. By introducing a generic today, they're really cutting

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<v Speaker 1>out that middleman. And so at the end of the

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<v Speaker 1>day on the Myelon impact really nothing. So the stock

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<v Speaker 1>price is up a little bit today when you look

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<v Speaker 1>at the fun the mentals for Mylon now and this

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<v Speaker 1>is this is obviously a very big story, but how

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<v Speaker 1>are they positioned now to put this behind them and

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<v Speaker 1>move ahead. And if they do, then what are investors

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<v Speaker 1>looking at or what should they be looking at? Well,

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<v Speaker 1>I think it was an extremely smart decision just come

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<v Speaker 1>out and address it. So we've seen several companies in

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<v Speaker 1>the past year we've faced similar congressional probes and pushback,

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<v Speaker 1>and they've really tried to say, look, you know, we

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<v Speaker 1>invest in our Indeed, drug making is an expensive practice,

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<v Speaker 1>and they haven't really just come out and addressed it.

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<v Speaker 1>So I think that addressing a head on was a

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<v Speaker 1>very smart decision from an image perspective and just limiting

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<v Speaker 1>any overhang on the stock. And then secondly is that

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<v Speaker 1>they've been moving away from EpiPen. So Epypen right now

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<v Speaker 1>is about ten percent of revenue. They've been expecting that

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<v Speaker 1>a generic was coming from Teva, and this new generic

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<v Speaker 1>essentially blocks generic competition and allows them to focus on

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<v Speaker 1>their core strength, which is really their generic division. And

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<v Speaker 1>what are the what should be watching there? What's next?

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<v Speaker 1>Or what what is what do we think what step

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<v Speaker 1>could they take? They would say, Okay, time to buy

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<v Speaker 1>some more this stock. So the biggest thing to be

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<v Speaker 1>looking for when they report next quarter will be the

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<v Speaker 1>integration of their newly acquired Meta division and how well

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<v Speaker 1>they've been able to integrate, and how much that's been

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<v Speaker 1>thwarting the whole drug pricing pressure on the generic side.

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<v Speaker 1>Let's cuarto holo, thank you so very much. Fascinating, what

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<v Speaker 1>a fun start to cover, always fun, fascinating, Big farm

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<v Speaker 1>and more from our own Liz Cardajlo. She is with

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<v Speaker 1>Bloomberg Intelligence right here in New York City, specialty farm

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<v Speaker 1>and biotech analyst. She is. Thanks so much to Liz

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<v Speaker 1>well some news. Ha. We say rest in peace now

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<v Speaker 1>to Gene Wilders, star Willy Wonka so many mel Brooks comedies.

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<v Speaker 1>He's dead at the age of eighty three, according to

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<v Speaker 1>his family, and of course we send them all our

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<v Speaker 1>sympathies and just terrific memories. At last of Gene Wilder.

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<v Speaker 1>This is taking Stock on Bloomberg Radio. I'm Kathleen Hayes.

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<v Speaker 1>This is Bloomberg. Yeah,