Generic Drug Producers Face Pricing Issues

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It is a well-known fact that prescription drug prices are a problem that trickles from the manufacturer all the way to the consumer. It is, however, a little-known fact that prices are being cut for generic drugs as opposed to their name brand competitors.

Looking at recent events regarding those generic drugs, big pharmaceutical companies such as Teva Pharmaceutical or Mylan, have seen their market values go down respectively.

There are many small companies that produce the off-brand, cheaper versions of popular drugs that are currently getting broadsided by the large players in the industry. With wholesalers forcing prices down, and legislation, the industry is in an odd state at the current moment in time.

Some analysts have stated that the market recovery time could take six to nine months before the prices find some sort of stabilization. Evercore analyst, Uber Raffat stated that “the question really is: what does that mean going forward? If you look at the way Mylan and Teva stocks have behaved and you look at the way their estimates have been revised, it clearly suggests a material worsening in the business.”

The stock for Teva dropped down a staggering 50.7% during the month of August, while recovering slightly up 7.9% so far in September. The number one player in the market, Teva, may be losing its hold on that title as their market cap fell by nearly half to around $17.56 billion.

Teva is not the only company that has been plagued by the pricing confusion. Pressures to sell pharmaceutical stocks have seen Mylan shaving off $4 billion from its market capitalization during the month of August.

With the prices of lifesaving drugs in confusion with the cheaper generic versions, the industry seems to be quite topsy-turvy at the current time. Hopefully, it can smooth out and benefit both the producers and more importantly, the consumers who need the medicine to survive.

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