How EpiPen Became A Hit

 Mylans marketing turned the allergy device into a must-have. 

- Cynthia Koons and Robert Langreth

In a 2007 purchase of medicines from Merck KGaA, drugmaker Mylan picked up a decades-old product, the EpiPen auto injector for food-allergy and bee-sting emergencies. Management first thought to divest the aging device, which logged about $200 million in revenue. Then Heather Bresch, now Mylan’s chief executive officer, hit on the idea of using old-fashioned marketing in part to boost sales among concerned parents of children with allergies. That started EpiPen, which delivers about $1 worth of the hormone epinephrine, on a run that’s resulted in its becoming a $1 billion-a-year product that clobbers its rivals and provides about 40 percent of Mylan’s operating profit, says researcher ABR|Healthco. EpiPen margins were 55 percent in 2014, up from 9 percent in 2008, ABR|Healthco estimates.

How Mylan pulled that off is a textbook case in savvy branding combined with a massive public awareness campaign on the dangers of child allergies. Along the way, EpiPen’s wholesale price rose roughly 400 percent, from about $57 each when Mylan acquired the product. “They have done a tremendous job of taking an asset that nobody thought you could do much with and making it a blockbuster product,” says Jason Gerberry, a Leerink Partners analyst.

But while EpiPen has given countless parents a sense of security that their children can go out in the world safely, the device’s soaring price—up 32 percent in the past year alone—has forced some families to make difficult choices to afford the life-saving medicine. The price increases are among the biggest of any top-selling brand drug, according to DRX, a unit of Connecture that tracks drug pricing. After insurance company discounts, a package of two EpiPens costs about $415, DRX says. By comparison, in France, where