Generic Drug Sector Struggles Even As The Need For Cheaper Drugs Grows
Lower prices for generic drugs in the US are continuing to drag on revenues of drug makers like Teva, Sandoz, Mylan and Endo. Industry leaders say the US market is stabilizing, but price erosion and other negative factors impacted second quarter financials across the sector. Teva is attempting a turnaround and Mylan is exploring strategic alternatives.
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Perrigo previously saw value in keeping its prescription pharmaceuticals in-house, but now says it will sell off or spin out the topical generics to focus on its over-the-counter brands. Questions remain about whether the company's generics portfolio is valuable enough to stand alone or attract a buyer.
CEO Heather Bresch gave a soliloquy on US health care during the second quarter call, saying ‘perverse incentives’ have created a system that ‘feeds on higher prices.’
Teva has been able to hold onto a roughly 85% share of the Copaxone 40 mg market, but expects pressure from generics will intensify in the second half of the year.