Posted by Michael Wonder on 17 Aug 2017
Generic drug makers feel pinch as prices crumble
17 August 2017 - Intensified competition hurts copycat pharma groups while buyers drive harder bargain.
If a company makes money by copying the inventions of others, is it entitled to skim a thick layer of cream off the top?
That is the question on the lips of investors in generic drug makers, after a torrid second quarter that resulted in billions of dollars being wiped from the market value of the biggest players — Israel’s Teva Pharmaceutical and Netherlands-based Mylan.
“This is an industry that has maintained roughly 30 per cent operating margins over a long period of time, with improvements year on year,” says Jami Rubin, analyst at Goldman Sachs. “Now we’re entering a period where we’re seeing margin degradation.”
