Alpharma Swamped By Negative Influences

US generics company Alpharma experienced a drop in revenues and profits in the third quarter and first nine months of 1996, which was due to a number of factors. The firm's US pharmaceutical and animal health operations have been heavily influenced by industry-related factors, according to Einar Sissener, chief executive of Alpharma, who added that there were also some weaknesses in the firm's other businesses.

"Our US pharmaceuticals results have been negatively affected by the loss suffered from the bankruptcy of a major wholesaler in the third quarter and a rapidly-emerging fundamental shift in industry distribution, purchasing and stocking patterns in the US pharmaceutical industry. In the third quarter alone, this shift has resulted in a drop in our overall sales volume in this division of around 20%, and a volume drop of over 50% to generic drug distributors, which have represented an important but declining part of our base business," he said.

Mr Sissener added that programs recently initiated by national wholesalers have accelerated these shifts and have also fueled a trend of lower prices. Mr Sissener anticipates that as the industry adjusts, the firm's volume may continue to decline, at least in the near term. Production has been adjusted accordingly.