LONDON, UK / ACCESSWIRE / January 13, 2017 / Active Wall St. blog coverage looks at the headline from insurance major Cigna Corp. (NYSE: CI) and Mylan N.V. (NASDAQ: MYL) as the former Company dropped Mylan's EpiPen from its prescription drug list effective immediately. In a recent approved prescription drug list issued by Cigna on January 07, 2017, its coverage for Mylan's EpiPen epinephrine auto-injector has been replaced by the generic version from Impax Laboratories Inc.'s (NASDAQ: IPXL), Adrenaclick ? a generic low-cost epinephrine auto-injector. Register with us now for your free membership and blog access at:

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Karen Eldred, spokesperson for Cigna said:

"The generic version, available now in pharmacies, has the same drug formulation and device functionality as the branded medication, but at a substantial cost saving."

Those Cigna's patients not benefitting by using the generic versions, and if their Doctor recommends, they can ask for the original EpiPen. However, Cigna has clarified that this will not mean that the drug will be covered by the patient's health care plan.

Mylan's EpiPen epinephrine auto-injector is used for the treatment of allergic reactions in potentially life-threatening situations.

Cigna's action is significant given its timing. Just a day before, i.e. on January 11, 2017, President-elect Donald Trump had commented that many drug companies are "getting away with murder" when setting their products' prices. Mr. Trump had said that a new bidding procedure for the pharma industry would be created to negotiate drug pricing.

Background

Mylan had come under political and public fire for its exorbitantly priced EpiPen epinephrine auto-injector in August 2016. A EpiPen pack of two cost over $600, which was more than 400% increase of the price since 2009. Following the uproar, Mylan had promised to reduce the price of its EpiPen. It has also announced price rebates up to 85% for certain patients to counter the allegations.

In September 2016, Mylan CEO's Heather Bresch was asked to testify before the US Congress, explaining the Company's stand for the exorbitant pricing of the life-saving drug. In October 2016, Mylan agreed to a $465 million settlement with the US Department of Justice ("DOJ") and other government agencies. Mylan was accused by the Centers for Medicaid and Medicare Services (CMS) for falsely classifying EpiPen. Under the Medicaid Drug Rebate program, Pharma companies pay rebates to CMS and they pay less if the drug is classified as generic. It was found that Mylan was paying the lesser amount, i.e. the generic rate to CMS for the branded EpiPen.

To counter the negative backlash, Mylan launched a generic version of the EpiPen in December 2016, which was available at $300 for a twin pack. This is half the price of the original twin pack of EpiPen.

Mylan is downplaying Cigna's move and its impact on the overall sales for the branded EpiPen and the generic version. According to a CNN Money report, Mylan was not distressed by Cigna's action and hinted that it had anticipated the move since the launch of its generic version of EpiPen in December 2016.

Cigna's decision impact on generic substitutes

The ongoing EpiPen price debate has benefitted the manufacturers of generic versions of Mylan's EpiPen. Following Cigna's announcement, US specialty pharmacy CVS Health announced on January 12, 2017, that is offering Adrenaclick at $109.99 for a twin pack. CVS customers will also qualify for a manufacturer's coupon, which will knock $100 off that price. This makes CVS Health's offer one of the lowest priced generic epinephrine auto-injectors in the market. This would benefit patients with and without insurance coverage. CVS's aggressively priced offer also brings the fight directly to the door of Mylan.

Stock Performance

On Thursday, January 12, 2017, the stock closed the trading session at $144.67, rising 1.42% from its previous closing price of $142.64. A total volume of 1.72 million shares have exchanged hands, which was higher than the 3-month average volume of 1.30 million shares. Cigna's stock price advanced 9.28% in the last month, 18.62% in the past three months, and 11.28% in the previous six months. Furthermore, since the start of the year, shares of the Company have gained 8.46%. The stock is trading at a PE ratio of 19.67 and has a dividend yield of 0.03%. At the closing bell of yesterday's session, Cigna's stock recorded a market capital of $37.12 billion.

On Thursday, Mylan's stock dropped 1.37%, ending the trading session at $36.77. A total volume of 7.17 million shares were traded at the end of the day, which was higher than the 3-month average volume of 5.90 million shares. The stock currently has a market cap of $20.01 billion.

Impax's shares closed higher by 2.82% ending yesterday's trading session at $12.75 with 2.58 million shares traded for the day. The stock currently has a market capitalization of $969.26 million as of its last closing price.

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