NEW YORK (CNN) – Mark Baum believes the relentless EpiPen price hikes are “shameful” and his company is plotting a $100 alternative for the lifesaving allergy treatment.
Baum, known for offering a $1 substitute for the $750 AIDS drug Daraprim, told CNNMoney on Tuesday that his company Imprimis Pharmaceuticals (IMMY) has been quietly working on a compounded version of EpiPen for months. The company hopes to have it ready by the end of the year.
The plans come amid the latest price gouging scandal over the 400% increase in EpiPen prices by Mylan (MYL). The drug maker and its CEO Heather Bresch have become the newest faces of corporate greed. In response to the outcry, Mylan took the unusual step of announcing a fast-track launch of its own $300 generic EpiPen. But Baum says his version of EpiPen would cost very little to make. He pointed that one milligram of epinephrine, which is three times more than what’s needed in an EpiPen, costs just a few bucks.
“The cost of epinephrine is literally less than a Big Mac,” he said of EpiPen’s main ingredient.
The auto injector is available for between $3 and $7. He believes he can make a customizable version of EpiPen and sell it profitably for less than $100, without gouging the public.
“We don’t have the desire to charge the public even $300, for something that costs so little,” Baum said.
“That’s not how I want to live my life.”
Imprimis has already had success in taking on expensive branded drugs with cheaper compounds. Last year, the company launched a $1 alternative to Daraprim, the AIDS drug that overnight saw an incredible 5,000% price increase from the company led by the infamous Martin Shkreli.
Today, Imprimis has captured 20% of the market for this critical AIDS drug, producing more than 17,000 doses of its alternative, Baum told CNNMoney’s Paula Newton.
So how does it work? As a compounder, Imprimis takes items already approved by the FDA and repackages them to create the drug. Baum thinks this process can easily be replicated with EpiPen.
Another factor is that tiny Imprimis doesn’t have nearly the same costs that big drug companies do. Baum’s $52 million company is located in a modest office park in the outskirts of San Diego and has just 112 employees. By comparison, Mylan is a $23 billion giant with a workforce of nearly 35,000.
Compounded drugs may be a tougher sell because of safety concerns. In 2012, a meningitis outbreak caused by a Massachusetts compounding pharmacy led to the deaths of 64 people.
Baum insists that Imprimis focuses on quality and has a deep understanding of epinephrine. “We understand how the drug works and can make it effectively and affordably,” he said.
The Imprimis CEO offered a mixed take on Bresch, the controversial Mylan boss. He applauded her for being “honest” about serious problems in the opaque pharmaceutical supply chain that encourage higher prices.
Given Mylan’s near-monopoly in the EpiPen space, Baum explained that Bresch would have been fired had she not raised prices.
“It would be CEO malpractice if she didn’t,” he said.
But Baum said he would not have raised the price as much.
“I don’t need to make $19 million a year,” Baum said, referring to the big pay package Bresch took home last year.
“Tonight when I go home I’m going to eat a nice piece of fish and the fish I eat isn’t any better or worse than what she is going to eat.”