CVS, Walgreens, Wal-Mart Tighten Pressure on Generic Drug Manufacturer Deals
Many renowned retail pharmacies in the United States, including Walgreens Boots Alliance Inc., CVS, and Wal-Mart Stores Inc. are exercising more control as they buy generic drugs, enforcing reduction in prices most likely to affect drug manufacturing companies for a while, some industry experts stated on Thursday, August 3, 2017.
According to sources, the pressure is aggravated by rigorous efforts from health regulators of the United States to speed up approvals of imitated drugs. The degree of the shift appeared to be clearer this week as wholesale drug distributers like AmerisourceBergen Corp, Cardinal Health Inc., and the topmost generic drug manufacturer in the world Teva Pharmaceutical Industries Ltd, cautioned of decrease in prices of generic drugs. The price decline is predicted to reach up to nine percent by the end of this year.
The news also displayed shares sell off from generic distributors and manufacturers. As per the analysis done on Thursday, Mylan NV dropped up to six percent, while its rival Teva fell up to twenty four percent, and AmerisourceBergen dropped down to ten percent in terms of shares. Drug manufacturers Endo International Plc and Perrigo Co Plc went down by six percent and five percent, respectively.
Jeff Jonas, portfolio manager of Gabelli & Co said, “there’s no doubt those people are gaining way better pricing and are doing well in squeezing the drug producers on margins. It’s going to get tougher for a while, they are probably planning to keep the manufacturers off against one another.” In an emailed message, Express Scripts quoted that its collaboration with Walgreens will help boost their capability to further decrease the price of generic drugs. Express Scripts added saying, “scale matters especially when you are able to negotiate and deal on behalf of eighty three million individuals.”
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