According to a report by CNBC, Sandoz “does not expect Amazon to have a major impact on its business.” Wait, what? Fine, we’ll back up. Amazon is still sniffing around the pharma world. This time, it’s talking with generic drug giants, including Mylan and Sandoz. While the specific topics of conversation remain unclear, the smart money is on wholesale / distribution, right? What do you think is happing in the “war rooms” at McKesson, Cardinal Health, and other leading distributors? How does an industry defend against a cash-flush company that doesn’t seem to worry about profitability? That’s why InsightCity is no longer considering Cardinal Health as an acquisition target. Yep. That’s why.
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.
Mergers & Acquisitions – the making of a new company, new products, and the seemingly endless new opportunity. But it’s not all sunshine and rainbows; just ask some Mylan employees. Mylan announced in a December 5 SEC filing that they are “currently developing the details of the cost reduction initiatives, including workforce actions,” and that “less than 10 percent of its global workforce may be impacted.” That’s a significant number considering Mylan reported 35,000 employees in 2015. In October, Mylan terminated 94 employees after acquiring Meda Pharmaceuticals in New Jersey. According to FiercePharma, Mylan provided “severance, benefits and outplacement services during [the] transition.” But that’s not the news this 10% wants to hear. To them, M&A feels more like MMA [spoiler alert: it’s a broken nose].
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.
As President of the National Association of State Boards of Education in 2012, Gayle Manchin started a campaign to place epinephrine auto-injectors into schools nationwide to treat students facing life-threatening allergic reactions. This movement led to several laws that either required or gave funding preference to schools that kept epinephrine auto-injectors in-stock. Mylan, maker of the EpiPen – one of the only epinephrine auto-injectors – then worked to outfit schools everywhere with the life-saving drug. We’re sure Mylan CEO, Heather Bresch, was on board with the idea. You’re supposed to do what your mom tells you to do, right? Oh, did we not mention that Bresch and Manchin are related? That’s probably not relevant. This is how we felt.