Teva’s been in the news a lot recently, so here’s a roundup to make sense of all of it. Going chronologically, first Teva announced it would be cutting 14,000 jobs company-wide—more than a quarter of its total workforce. The company still has a lot of debt after buying Allergan’s generics business, so they’re planning on a two-year company restructuring. Teva’s a huge deal in its home country of Israel, so this led to thousands of Israeli public sector workers striking last Sunday in solidarity with Teva workers. Israeli PM Benjamin Netanyahu met with Teva’s new CEO Kare Schultz to try to convince him to leave the company’s Jerusalem plant out of their restructuring plan, but they’re planning to go through with it anyway.
Generic company profits are eroding and, according to an article in Bloomberg, this can be traced to the upstart of family-owned drug manufacturing facilities in India. While “family-owned manufacturing facilities in India” might raise both eyebrows for people in drug markets around the globe, India’s Union Health Ministry has proposed new quality checks on its drug manufacturers. The increase in generics competition has caused downward pressure on prices, giving fits to giants like Teva, Mylan, and Sun—all of whom are feeling the squeeze. The editors at InsightCity are pleased the low-cost regions aren’t driving down our earnings. Maybe our $0 (USD) in revenue explains their lack of interest. Nah, they just couldn’t compete.
Maybe you should talk to your doctor to see if a HealthyDose™ of biosimilars is right for you. Side effects include: euphoria caused by an acute awareness of feeling yourself getting smarter, accusations of being a know-it-all by your colleagues, and more euphoria due to objectively knowing you are in fact smarter than your colleagues.
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Off-setting the post-election market bump is some downside for pharmaceuticals, specifically generics manufacturers. DOJ recently expanded its price fixing probe to investigate more than a dozen generic drug makers, with potential charges in tow. Cue textbook reaction to uncertainty in the markets: Shares plummet. Mega-manufacturer Teva felt it especially hard, with stocks taking a dip of more than 9%. Other big players like Mylan, Endo, and Impax also took solid hits. The reaction may not be entirely unwarranted considering the almost-simultaneous price jumps for several drugs across several manufacturers. The heart medication, Digoxin, recently saw an all-around sevenfold price hike, while the cost of antibiotic doxycycline increased by 121% within a few months. Looks like DOJ has some questions and investors aren’t waiting around for the answers.
The FDA announced an amendment regarding citizen petitions that will impact branded drug makers. A citizen petition is supposed to be submitted to the FDA if the safety or efficacy of a drug is in question. The drug is then delayed or blocked from going to market. Some companies have instead used this process as a tactic to protect sales of their drug against would-be competing biosimilars and generics. But effective January 9, 2017, a citizen petition will not be considered if the drug in question “[does] not raise valid scientific and/or legal issues.” Industry lobby group PhRMA has issued requests regarding the amendment, most of which the FDA has rejected. You can bet the battle is far from over with companies’ patents in play.
Teva has announced plans to purchase Anda, Allergan’s generics distributor. This comes on the heels of Teva having purchased roughly $40 billion worth of Allergan’s generic drugs, aka the Actavis Generics division. Anda’s reach goes beyond Actavis, however. According to the release, they distribute “generic, brand, specialty and over-the-counter pharmaceutical products from more than 300 manufacturers.” Teva projects Anda to bring in over $1 billon in third party revenue this year, and the deal is set to be completed in the second half of 2016. Hey Teva, don’t go filling up on candy or you won’t have any room for a main course of innovative pharmaceutical products…am I right? Anyone? Too much? Sorry.
One year to the day since Teva announced the acquisition of Allergan’s generics business it finally has the thumbs-up from the Federal Trade Commission (FTC) to move forward. However, the proposed $40.5B acquisition comes with some strings attached—Teva must divest 79 of its own products to appease the FTC and keep the US pharma market competitive. But it doesn’t stop there. Teva is also required to provide long-term supply contracts to several of their API customers to prevent any anticompetitive backlash stemming from the agreement. As the largest generics producer in the world, Teva’s portfolio just grew substantially, but so did Allergan’s bank account. What’s Allergan going to do with all that moolah?