Teva And Developments In The US Generics Market

With the announcement of the (reverse) acquisition by Bergen Brunswig, a leading US distributor of medicines, of IVAX, one of its largest generics manufacturers (see story this page), came the later's third quarter results. IVAX finished life as a separate entity with a third-quarter loss of $178 million on turnover of $223 million, a drop of 30% on the like, year-earlier.

In contrast, notes the Marketletter's Israeli correspondent, Teva, which also has a strong presence in the US generics market, finished the same period with a profit of $23.9 million on a turnover of $236.8 million ($19.6 million and $201 million respectively for the same quarter of 1995). Gross profit rose to 39.1% of sales in this quarter, from 35.9% in third-quarter 1995.

The US generics market is under pressure as health maintenance organizations seek ways to cut health insurance costs. Furthermore, the market has seen a flow of generic approvals following a dry period in the early 1990s. These are the main reasons why generic drugmakers are delivering results below expectations.