Mylan's (MYL) Steps on EpiPen Do Not Go Far Enough - Wells Fargo's Maris

Wells Fargo analyst David Maris weighed in on Mylan (NASDAQ: MYL) after the company announced it will expand its existing EpiPen access program with a $300 savings card and increased eligibility, amid mounting political pressure.

Maris said while a good start, these steps do not go far enough to address the underlying issues the Senate and many parents are concerned about, and as such, they believe an FTC investigation and Senate hearings are still a possibility.

The analyst said the steps announced by Mylan lack three important components:

1) Lower prices. It appears to us from the press release that Mylan is not reducing the price of EpiPen. While some patients will be eligible for lower costs due to discount cards and expanded patient assistance, the price is not dropping. In other words, it appears that some insurance companies and those patients covered by good insurance plans will continue to pay current prices and see no discounts. In economic terms, this appears to be cost-shifting. Many discount cards never reach the consumer or the pharmacy counter. Many patients do not have the time to fill out patient assistance forms.

2) Relief. We think Mylan’s plan does nothing to reimburse the parents and children who have endured very high prices, nor does this plan seem to help those parents and children who have already prepared for this coming school year. Discounting after much of the country is already back-to-school does nothing to alleviate the recent out-of-pocket burden of these families.

3) Responsibility and contrition. Mylan has not addressed the key questions of motivation and intent of its price increase strategy that we believe is at the heart of the public interest. Mylan mentions a healthcare system that is shifting more costs to consumers, but in the press release, we do not see Mylan’s acknowledgement of Mylan’s role in EpiPen price increases.

The firm maintained a Market Perform rating and $43-$45 valuation range on MYL.

For an analyst ratings summary and ratings history on Mylan click here. For more ratings news on Mylan click here.

Shares of Mylan closed at $43.15 yesterday.

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