Generic Drugmakers Struggle Despite US Push for Copycats

Generic drugmakers are being crushed by the very forces that the Trump administration is counting on to drive down prescription costs.

While policy makers are betting that opening the market to a deluge of new medicines and reforming the drug supply chain will help contain rising prices, many widely used copycat medications are already seeing their prices fall at such a rapid rate that their makers are struggling to keep their heads above water.

As a result, companies including Mylan NV and Perrigo Co. are being forced to consider shakeups. Mylan’s board said this week that it would consider radical changes to its business, while Perrigo said it would separate its generic business.

Both Mylan and Perrigo had been wagering that manufacturing new, cheaper alternatives to pricey complex treatments for cancer, arthritis and other diseases would help to offset the broader pain facing generic-drug firms. But the companies have encountered sizable hurdles in bringing them to market, including regulatory snags and legal battles over patents.

Meanwhile, rattled investors have fled. Perrigo shares have fallen 19 percent so far this year — including a decline of more than 10 percent on Thursday — while Mylan shares have dropped more than 12 percent in 2018, trailing the nearly 5 percent gain for the S&P 500 pharmaceutical subindex.

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