Pricing the Epipen: This

is Going to Sting
Group-4

AALEKH TAK - MBA20118

SUMANT M - MBA20112
VAISHALI TRIPATHI - MBA20113
VARUN KURICHH - MBA20114
VIBHOR SINGH - MBA20115
ZULFAQAR ALI HAIDER - MBA20117
About Epipen
● A medical device used to automatically
inject the dose of adrenaline(epinephrine)
through a spring loaded needle.
● Commonly used to treat life threatening
allergic reactions.
● The number of patients of Epipen has
increased by 67% over the past 7 years
raising the revenues from $200 million to
$1 billion.
About the case

● The case revolves around the customer dissatisfaction due to rise in prices of Epipen.
● Over the past five years, the company has increased the price of Epipen by more than
three and a half times.
● The company is facing the brunt of media houses, and enquiries about the pricing
decisions from the US Senator.
● In order to compensate for the rising prices, the company did offer discounts using
My Epipen Savings Card.
● Non uniform pricing across different countries was also adding to the consumer
dissatisfaction in US market
Plan of action Heather Bresch should take ?
1- COMMUNICATE WITH THE CONSUMERS THE FACTORS THAT CONTRIBUTE TO THE PRICE INCREASE
Factors -
● complex drugs distribution chain in the US
● High R&D cost for continuous improvement of the drug
● Advertisement and advocacy efforts to FDA Cost to make EpiPens available in school in order to increase
awareness and use of EpiPens.
2- COMMUNICATE WITH CONSUMERS THE STEPS TAKEN TO CONTROL THE PRICE
● New generic product being developed and price 50% less than the ordinary EpiPens.
● New saving vouchers had been introduces which offered the patient up to 50% of the price their co-pay of EpiPen.
3- IMMEDIATE RESPONSE TO CONGRESS QUESTIONS REGARDING THE-
● High price of EpiPens.and how the prices are decided.
● Attaching R&D and advertising budget which are the major contributors in price and the positive changes it has
brought in the product sales and value.
● Discounts offered TO Customers like My EpiPen Saving card providing discounts upto $100 for each Epipen.
● Assistance program to school to purchase EpiPens in order to use without prescription in emergency situation.
How many school across US have used this system in past 5 years.
4- REQUEST CONGRESS TO REVISIT THE PROCEDURES, REGULATIONS AND GOVERNMENT POLICY FOR
DRUGS DISTRIBUTION CHAIN IN US AS WELL AS PRICE CONTROL SYSTEM IN US AND REMOVE THE
MIDDLEMEN (PHARMACY BENEFIT MANAGERS )WHO ARE THE MAIN CONTRIBUTORS IN HIGH PRICING.
Why the plan of action is needed and the Risks involved ?

WHY?
● Mylan’s share has decreased by 10% in past few weeks and to stop the trend further the plan of
actions are crucial.
● To regain consumer’s confidence as acc to survey given in case 74% americans find pharmaceutical
drugs’ cost unreasonable, and 74% thought they are paying more price than other countries

RISKS INVOLVED
● They may get more negative media attention and their brand image may decline resulting in more
decline of sales.
● Consumers might react negatively to their reason of increasing prices of EpiPen
● Mylan was facing the lawsuits and EpiPens might be banned due to facing ethics issue on the pricing
that will lead Mylan as top pharmaceutical company going to down.
Does the variation in prices
across countries seem reasonable?
● Availability to the customers.
● Demand from the customers.
● Export/Import charges from governing authorities in
countries.
● Complexity within insurance policies.
What would happen if Mylan were
forced to make its prices more
consistent?
● Availability to the customers.
● Might lose out on profit/revenues.
● Easier to manage the financial details.
What changes, if any, would you make to Mylan’s pricing policy? Is there a better way to structure the discounts?

● Lower the price of the EpiPen, but not too significantly

● Lowering the price would show the company cares about the public and is
responding to the situation
● Customers who had switched to overseas sources could potentially come back, and
those who could not previously afford the EpiPen, may be able to budget the new
price into their plan
● To structure the discounts in a better way, Mylan can offer discounts that depend on
the insurance, income, or other financial criteria
What is the biggest risk that Bresch faces?

● Bresch’s father was a US Senator, making her face more brutal government scrutiny.
● She, as the CEO faced media attention being the culprit of the price hike.
● Bresch’s defender, Martin Shkreli was already infamous and accused for securities
fraud, that added to the problem.
● Her next step could potentially affect her career as well as the company.
CONCLUSION AND RECOMMENDATIONS

● This case focuses on-

○ How rising price drastically makes an impact on brand image and market share.
○ Impact of Variation of prices in different countries and consumers knowing about this differentiation.
● Recommendations-
○ They should focus on justifying this cost , so as to manage this uproar.
○ They should look for reduction in pricing for US Customers in a way that it does not reduce their sales
and market share.
○ Schemes and discounts could help the pricing to a certain limit and could be looked upon.
○ They should provide a solution to poor people who rely on epipen,