European Drug Makers Say Higher Energy Costs Eating Margins: Report - Teva Pharmaceutical Indus (NYSE:TEVA)

  • Europe’s drug makers have warned about stopping manufacturing some cheap generic medicines amid surging electricity costs.
  • The generic drug industry lobby group, Medicines for Europe, representing Teva Pharmaceutical Industries Ltd TEVA,  Novartis AG’s NVS Sandoz unit, and Fresenius SE’s FSNUY Kabi business, sent a letter to European states’ energy and health ministers, asking for measures to relieve the cost burden.
  • According to Medicines for Europe, Generic associations petition national health authorities for more flexibility on drug prices, Reuters reported.
  • According to the letter, electricity prices have risen tenfold for some drug factories in Europe, and raw material costs have increased between 50% and 160%.
  • Medicines for Europe’s director general Adrian Van Den Hoven told Reuters, “higher energy costs just eat all of the margins of many makers of essential medicines in the fixed price system that we operate under in Europe.”
  • The report added that low-cost drugmakers typically sell off-patent medicines at prices set by national health agencies or insurers’ associations, which frequently also cut prices.

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