Will Mylan’s big Copaxone price break force Teva’s hand? Clients are pushing already

Thanks to Mylan’s gigantic price cut on generic Copaxone from earlier this month, Teva’s going to have to take the price on its branded product down. And it would be wise to start now, one analyst says.

Following Mylan’s move to sink the wholesale price of its Copaxone copy to $1,800 from $5,000, "those that have deals with Mylan will immediately enjoy price reduction of 60%" once rebates come into play, Bernstein analyst Ronny Gal wrote to clients Monday. But "those that have deals with Teva are locked," most of them until the end of the year.

But already, Teva’s clients are asking for some slack in light of Mylan’s move, and the way Gal sees it, "Teva would be wise to give in a little."

"We expect Teva will trade some 2018 upside for better relationships," he wrote, adding that "given the year is setting well," they can afford it.

Yes, Copaxone revenue will come in lower for the second half of the year, but Teva will also pick up points in the eyes of its clients. And those could be important when the Israeli drugmaker starts negotiations for next year and attempts to keep them from switching to Mylan’s knockoff.

Of course, goodwill won’t be enough to secure continuing business where the multiple sclerosis blockbuster is concerned. "Teva will either have to (come close to) match on price or lose the business," Gal wrote, noting that U.S. revenues on the moneymaker in 2019 "will be much lower."

But that’s where the company, whose generics unit is struggling alongside the rest of the copycat industry, is hoping branded up-and-comers can come in. Despite the $3 billion cost-cutting drive going on under the direction of new CEO Kåre Schultz, Teva keeping plenty of money behind CGRP candidate fremanezumab and neuro drug Austedo.

"We are backing fremanezumab 100%," Schultz said in December. "We have of course made sure we have the resources" to back the migraine therapy’s rollout and cue a "successful launch of Austedo."

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