Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

The US government's antitrust investigation of the generic drug industry has been quiet for more than a year and has resurfaced with a The Washington Post article (below) today reporting that the inquiry has broadened to include hundreds of products from 16+ companies. <a href="https://www.smartkarma.com/entities/19974" target="_blank" data-smartkarma-citation="entities:19974:1">Aurobindo Pharma (ARBP IN)</a> has been at the center of the inquiry while <a href="https://www.smartkarma.com/entities/16406" target="_blank" data-smartkarma-citation="entities:16406:1">Dr. Reddy'S Laboratories (DRRD IN)</a>, <a href="https://www.smartkarma.com/entities/98" target="_blank" data-smartkarma-citation="entities:98:1">Sun Pharmaceutical Indus (SUNP IN)</a>, <a href="https://www.smartkarma.com/entities/870" target="_blank" data-smartkarma-citation="entities:870:1">Mylan Nv (MYL US)</a>, <a href="https://www.smartkarma.com/entities/868" target="_blank" data-smartkarma-citation="entities:868:1">Teva Pharmaceutical Sp Adr (TEVA US)</a> and at least ten other companies (listed and private) have some exposure.The resolution of the investigation (fines, settlements, etc.) itself probably won't have a "life-threatening" impact on most companies, but industry fundamentals will remain challenging as price competition should remain intense.We don't think that a resolution is imminent, so don't fall into the trap of thinking "no news is good news." These investigations are slow and lengthy by nature, so "no news is no news."

The US government's antitrust investigation of the generic drug industry has been quiet for more than a year and has resurfaced with a The Washington Post article (below) today reporting that the inquiry has broadened to include hundreds of products from 16+ companies. Aurobindo Pharma (ARBP IN) has been at the center of the inquiry while Dr. Reddy'S Laboratories (DRRD IN), Sun Pharmaceutical Indus (SUNP IN), Mylan Nv (MYL US), Teva Pharmaceutical Sp Adr (TEVA US) and at least ten other companies (listed and private) have some exposure.The resolution of the investigation (fines, settlements, etc.) itself probably won't have a "life-threatening" impact on most companies, but industry fundamentals will remain challenging as price competition should remain intense.We don't think that a resolution is imminent, so don't fall into the trap of thinking "no news is good news." These investigations are slow and lengthy by nature, so "no news is no news."

India Generic Drugs: US Antitrust Inquiry Widens