News : US pharmaceuticals company Endo Health Solutions is to purchase the US speciality generics firm Boca Pharmacal , according to Contract Pharma. The acquisition involves a payment of US$225mn in cash, in a deal that will see Endo expand its business platform and speciality pipeline through its Qualitest business platform. The transaction is expected to formally close in Q413.
BMI View: The necessity of reducing healthcare spending by both the public and private sectors in the US is having a direct downward effect on prescription drug expenditure. The government, employers and families can readily identify with medicine cost containment, but have difficulty lowering spending on more nebulous areas such as healthcare administration, technology and intermediaries in the supply chain. There is also the inherent difficulty of reducing the wages of medical personnel, which account for a sizeable proportion of total healthcare spending. Downwards pressure on revenue generated by prescription drug firms will become increasingly common, as early efforts to do so have proved successful.