Teva’s new plan is to raise drug prices, but it won’t be easy

Cost-cuts, including sweeping layoffs, figure prominently in Teva Pharmaceutical Industries Ltd.’s new two-year plan to turn its business around. Teva TEVA, -3.35%  shares rose 10% on Thursday and 7.6% on Friday after the restructuring news.

 

But the debt-laden company said it also wants to stay focused on revenue — and hopes to wring more from its generic drugs business by raising prices.

 

There’s just one problem: Generic drug prices have been declining all year, posing a crisis for the industry and prompting the very cost-cutting that Teva just announced.

 

Teva may not have all that much agency to increase prices, in other words, since external factors have been pressuring generic prices down. The company effectively admits as much.

 

“Some of them we will succeed, some we will not. And those where we will not — we will discontinue,” Chief Executive Kåre Schultz said on a Thursday conference call, according to a FactSet transcript…

 

Read the full article provided by Emma Court here.