Moody's Investors Service says U.S. drug manufacturers can expect to see their credit ratings drop [0] over the next year, despite respectable cash flow and decent profitability. Companies such as Schering-Plough, J&J, Genentech and Pfizer were major debt drivers, according to Moody's semi-annual report. The report looked at the ability to pay debts in addition to the often-mentioned issues of patent expirations, generic competition and regulatory challenges. 

The report cites concerns about increasing levels of offshore cash by the companies, which held $58 billion in the U.S. and $27 billion offshore in 2006, but increased offshore holdings to $63 billion in 2007, with just $29 billion in the U.S. that year. Couple this with an increasing debt level from $75 billion to $94 billion in the same time-frame and the pharma industry's usually strong credit rating is likely to fall.

- read the WSJ piece [1]
- check the report [2] from Forbes

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PwC to pharma: Adapt and invest or die [3]
Patent 'cliff' looms for Big Pharma [4]
Where's the ROI on drug R&D budgets? [5]
Is pharma's drug discovery model sustainable? [6]