- Summary: Despite steep price cuts by Merck to protect its Zocor (simvastatin) cholesterol drug from generics, the generics have captured fully 49% of new simvastatin prescriptions in the U.S. since they became available at the end of June. Israeli generic drugmaker Teva Pharmaceutical captured 32% of those new prescriptions, while Dr. Reddy's of India gained 14% and the remaining 3% went to India's Ranbaxy. Pfizer's Lipitor, the most popular treatment, also saw its share of new prescriptions drop, from 42% the week before to 40% the week the generics were released. Pressure against Lipitor is mounting as insurers encourage a move to the reduced-price Zocor or a generic simvastatin. AstraZeneca's statin Crestor has also been gaining share recently, especially among newly diagnosed patients.
- Comment on related stocks/ETFs: Negative for Merck (MRK) and Pfizer (PFE), a significant positive for Teva (TEVA) and Dr. Reddy's (RDY), and incrementally positive for AstraZeneca (AZN). Israeli journalist/analyst Shlomo Greenberg recently called Teva's stock fall in the wake of the Merck price cut 'patently absurd' and a great buying opportunity - will he be proven right? Note, however, that Teva had some bad news yesterday on the legal front in a suit with Forest Labs.
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