The fall in the price of drugs on which patent have expired is liable to lead to a life-threatening shortage of drugs, according to Dr Rob Koremans, president and CEO of Teva Europe, as reported in today's "Financial Times".
“Sustainability of supply is an issue if prices are driven down,” Koremans is quoted as saying in the "Financial Times" report. He explained that as prices fall, demand will rise, causing essential products to become out of stock. Koremans cited the example of the US, where falls in prices of life-saving drugs have become a cause of concern to the authorities. He added that margins were being squeezed by the introduction of tenders in EU countries such as the Netherlands, Germany, Spain and Portugal, and that it was not economically sustainable for generic companies to expand capacity in Europe.
Koremans also expressed concern over the quality of drugs supplied by companies that slash prices in order to win tenders, saying, “It’s something we need to monitor very carefully.”
Teva's share price is up 0.35% at NIS 170.90 on the Tel Aviv Stock Exchange this morning. The share closed at $45.63 in New York on Friday, giving a market cap of $40.3 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on April 30, 2012
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