Teva offers to buy Mylan in US$40.1 bil. deal


By Linda A. Johnson, AP

TRENTON, New Jersey –Generic U.S. drug giant Teva formally offered to buy fellow drugmaker Mylan for about US$40.1 billion (NT$1.25 trillion) in cash and stock on Tuesday, despite Mylan’s cold shoulder and the certainty the proposed acquisition will bring intense scrutiny by antitrust regulators.

If Israel-based Teva Pharmaceutical Industries Ltd. succeeded, the combination would dominate the global generic drug market, be a major contender in some other specialty drug categories �X and have the leverage to try to raise generic drugs prices.

After years of stability, generic medicine prices recently have risen several percent a year on average. Some have skyrocketed by up to 1,000 percent, generally when competition vanishes due to consolidation or shortages caused by manufacturing quality problems.

A tie-up wouldn’t just increase Teva’s scale, allowing it to boost profitability by cutting jobs and other costs. It would increase its leverage in negotiating drug prices with insurers and other payers, noted Les Funtleyder, health care portfolio manager at E Squared Asset Management.

��That’s going to feed into regulators’ interest,�� he said.

That’s particularly true in the U.S., where seven of eight prescriptions filled are for generics and employers, insurers and government health programs encourage their use to hold down costs.

��It doesn’t mean the deal can’t be done,�� because the companies could divest some assets, Funtleyder said, but he noted Mylan’s reluctance.

A Mylan spokeswoman did not immediately return a call seeking comment Tuesday.