May 16 2018

Drug Channels: Generic Deflation Roils the Channel – And Will Get Worse, generic pharmaceutical manufacturers.#Generic

generic pharmaceutical manufacturers

Generic pharmaceutical manufacturers

Generic pharmaceutical manufacturers


Generic pharmaceutical manufacturers

Thursday, August 10, 2017

Generic Deflation Roils the Channel And Will Get Worse

Generic pharmaceutical manufacturers

Generic pharmaceutical manufacturers

Note that this index includes only products that had been generic for at least 12 months. This methodology eliminates the deflation that occurs when a brand-name drug loses exclusivity and faces generic competition. See Exhibit 138 in our 2017 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.

  • Red Oak Sourcing (CVS Health-Cardinal Health)
  • Walgreens Boots Alliance Development (WBAD) Walgreens Boots Alliance with AmerisourceBergen
  • McKesson OneStop and ClarusOne (with Walmart)
  • Econdisc Contracting Solutions (Express Scripts and certain retail chains)

In May 2017, Express Scripts Econdisc group purchasing organization agreed to partner with WBAD to purchase generic drugs. See our May 2017 news roundup for details.

Shares of Teva Pharmaceutical Industries Ltd., the world s largest seller of generic drugs, fell 24% on Thursday in New York Trading after the company s quarterly revenue and profit fell short of analysts forecasts, driven by a 6% decline in generic product prices from the same period last year. The Israeli company said the pricing pressure on generics won t ease soon, and expects deflation to accelerate in the second half of the year. Teva s stock dropped an additional 13% Friday. DOWN

Generic pharmaceutical manufacturers

Note that these figures reflect only the pharmacy s invoiced cost and exclude off-invoice discounts, rebates, and other hidden price concessions provided to pharmacies. Actual (unreported) pharmacy acquisition costs for generic drugs may have dropped even further.

  • tetracycline 500 mg capsule (+16,203%)
  • metformin hcl er 500 mg tablet (+5,280%)
  • captopril 12.5 mg tablet (+4,824%)
  • polyethylene glycol 3350 powd (+4,718%)
  • captopril 25 mg tablet (+4,541%)


  • The FDA published a list of off-patent, off-exclusivity branded drugs without approved generics. It has promised to expedite the review of any generic drug application for a product on this list to ensure that they come to market as expeditiously as possible.
  • The FDA will prioritize its review of generic drug applications until there are three approved generics for a given drug product.

If the FDA s plans work, deflation should get worse before it gets better.

This scenario largely played out the injectable generic value chain a decade ago. With hospitals consolidating into two large buying groups, the cost of generic drugs dropped to borderline economic level (“a dollar per vial”). Drug companies began to skimp on investment in their facilities, which in turn led to FDA shutting down facilities and drug shortages. It feels like we may be approaching similar point when it comes to generic drugs. Look out below!

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