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Generics Killing Pharma?

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  • Description

    Morningstar analyst Damien Conover gives his outlook for the pharmaceutical industry.

  • Duration 3:56
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So much -- -- After expiring patents caused the pharmaceutical industry to lose more than thirty billion dollars to generic competition last year.

Is the industry headed for a rebound this year joining me now -- Damien -- -- from school research from Morningstar welcome.

Thanks for having me so 530 Eli Lilly lost a hefty sum last year do you expect the industry to -- -- -- from these patent losses this year.

Yeah I think so I think Europe and approaching an inflection point for the pharmaceutical industry were really moving away from.

These major patent losses and really -- word.

Pipelines that are getting much better probably better pipelines than we've seen in the past five years I think that should really.

Entice the investment community to take a look at the stacks.

Where you know they've been trading flat for many many years and finally just over the last few months starting to get a little bit of momentum.

Well let's go in this direction a better pipeline better indications that a much tougher FDA right so.

Is that gonna -- getting -- products to market.

You know it could I think what happened is if you look at the past few years the after he got very conservative in response to the -- recall the of -- is scares a lot of high profile.

Drugs -- side effects into the if he's gotten very conservative in what.

The pharmaceutical firms have done in response.

Is really focus to areas of unmet medical need -- -- -- in oncology and neurology and and the analogy in in these areas if he even show a little bit of efficacy.

You're probably gonna get through the FDA.

And that's much different then the judge that these firms are bringing to the FD a few years ago there were largely in primary care indications.

Aren't very much harder busters get dizzy hard hit.

Any big billion dollar revenue generator set will -- very soon.

I think so I think from fighter's standpoint.

They have a new drug that was just approved -- Zell Jansen this is in rheumatoid arthritis.

This could be a major Blockbuster it's a huge indication very strong -- team.

Another product that Pfizer's partner with them.

Upper Echelon it's called eloquence and this is for each of -- again.

-- other big product -- -- -- giant products in Pfizer's pipeline that I think really sets of Pfizer's pipeline to be one of the best it's been in many years.

And then you got the Obama care mandated insurance going into effect next year I imagine.

That's got to help the drug industry across the board brand names -- generics.

I think -- -- I think this is one thing that is just starting they come on the investors' radars for big pharma.

In 2014.

Get the mandated insurance that's gonna increase drug sales.

And generics would benefit a little bit more than branded farmer but nevertheless -- farmers should get a nice tail wind from obamacare into 2014.

So what is going on with the Supreme Court we know it's gonna take up this some so called pay for delay that's.

Essentially whether or not the brand name drug makers should be able to pay generic drug companies for agreeing to actually delayed putting treatments to market.

How do you think this sentence who wins.

He would be I think it's probably gonna be a case where you'll likely see.

The generics and the pharmaceutical firms be the winners here and the way that they wind is that I don't think that the Supreme Court will rule against these.

Sort of agreements in the past almost all the other cases had.

Largely favored the sort of settlements in the settlements are beneficial for both branded.

From sort of -- companies engineer companies I think it's gonna be a win for industry on this one Damian I really have no time but Eli Lilly are fighting who's the better stock -- They'll probably right now we're looking at -- potentially little bit better position great pipeline through most of its patent losses.

Doing a lot of stuff with restructuring I think prices -- of a better positioned pretty information today Damien Conover thanks so much of Morningstar.

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