TEVA - Why the FDA's Drug Competition Action Plan Is Bad News for Generic Pharmaceutical Stocks
It is no secret that prescription drug prices in America are the highest among all developed nations. A variety of factors have contributed to the issue, such as a lack of universal healthcare coverage, the staggering cost of conducting clinical trials to get drugs to approval, and price gouging by sector players with questionable motives.
The problem has not gone unnoticed. Since 2017, the U.S. Food and Drug Administration (FDA) has been conducting an initiative called the Drug Competition Action Plan to make prescription drugs more affordable. The campaign is working well, but it comes at the expense of lower revenue and profits for many sector players. What does this mean for investors? Let's find out together.
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