Credit Suisse analysts say they spy moderation of generic drug price erosion, relative to branded levels, which bodes well for the generics sector. Stronger pricing would represent "an underappreciated tailwind for generics manufacturers and drug distributors," they write in Barron's Soapbox column. The moderation was noted by generics makers and wholesalers, and "confirmed" by discussions during the Credit Suisse Pharma Supply Chain Forum this month.
FDA enforcement actions on GMP violators have stung some generics makers, minimizing competition among those whose quality is up to par. Consolidations and accelerating patent expirations further minimize competition on a drug-by-drug basis, they say.
Pricing stability will aid some drugmakers more than others. The analysts identify Watson Pharmaceuticals as well positioned to benefit, thanks to a greater sales contribution from U.S. generics than competitors.
The big three drug distributors will benefit, too, with "greater-than-expected gross profit dollars."
- here's the column