For Immediate Release
Chicago, IL –May 15, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Teva Pharmaceutical Industries Ltd. TEVA, Mylan MYL, Novartis NVS and Pfizer PFE.
Here are highlights from Tuesday’s Analyst Blog:
Generic Drugmakers Face Antitrust Suit Alleging Price Fixing
Shares of Teva Pharmaceutical Industries Ltd. fell almost 15% on May 13 following media reports of an antitrust lawsuit filed by 44 states against the company and several other generic drugmakers for allegedly artificially inflating prices of generic drugs, in some cases exceeding 1000%. Other companies named in the 510-page lawsuit were Mylan, Sandoz (the generic arm of Novartis), Dr. Reddy’s Laboratories and a subsidiary of Pfizer among others. While shares of Mylan were down 10%, Novartis’ stock declined around 2%. Dr Reddy’s was down more than 4% and Pfizer declined slightly.
The group of 44 states was led by Connecticut attorney general William Tong. The lawsuit, filed in Connecticut federal court, alleged that these drugmakers conspired during lunches, dinners, golf outings and other social events, to inflate the prices of more than 100 generic drugs. The lawsuit alleges that these companies perpetrated a multi-billion fraud on Americans by manipulating prices of generic drugs, which are supposedly cheaper “copycat” versions of the branded drugs. The generic drugmakers allegedly “systematically” divided the market so that they do not compete with one another and at the same time can charge high prices. If the allegations are true, the companies will be slapped with huge damages and penalties. Teva alone allegedly increased prices of more than 100 generic drugs.
Teva denied the charges saying that these were just allegations and that the company has not engaged in any conduct that will result in civil/criminal liability.
The lawsuit comes amid attempts by both President Trump and Congress to keep prices of drug prices low and ensure affordability of high-cost drugs. Trump has, time and again, criticized pharmaceutical companies for steep pricing of medicines. Industry players have been reeling under pressure for quite some time now as they fear that Trump’s pharma plan could dent their profits.
Though the industry has been constantly warned by Trump to keep prices of drugs affordable, it is probably not doing anything about it. On his part, the President can take several steps in this direction. He can push for faster generic approval, which he is already doing. He can also ask for discounted rebates to be disclosed, put limitations on promotions/advertisements of the drugs and mandate Medicare to negotiate drug prices with manufacturers.
It is high time drug companies take steps to provide relief to consumers by keeping cost of medicines affordable. Until then, the drug pricing controversy will remain an overhang on the space.
Teva, Mylan and Dr Reddy’s carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Medical - Generic Drugs Industry 5YR % Return
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Novartis AG (NVS) : Free Stock Analysis Report
Pfizer Inc. (PFE) : Free Stock Analysis Report
Mylan N.V. (MYL) : Free Stock Analysis Report
Teva Pharmaceutical Industries Ltd. (TEVA) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research