Mylan Falls as Wells Fargo Says It May Face Price Hike Scrutinyby
Mylan NV fell as much as 6 percent after Wells Fargo analyst David Maris said the generic drugmaker could be the next target of public criticism on drug price increases.
In a report titled “Is Mylan Next in Line for Pricing Scrutiny?,” Maris said the generic drugmaker could follow companies like Valeant Pharmaceuticals International Inc. and Turing Pharmaceuticals AG, which faced intense criticism and have had to appear before Congress to defend their drug-pricing tactics.
Mylan has taken some “exceptionally” large price increases in 2016, said Maris, who rates the stock market perform. They included a 444 percent increase on metoclopramide, a generic drug used for gastroesophageal reflux disease, a 400 percent rise on dicyclomine, used to treat irritable bowl syndrome and a 56 percent increase on tolterodine, one of the company’s biggest U.S. generics, the analyst said, citing IMS Health data.
“Given the regulatory environment, these pricing actions could bring greater scrutiny and headline risk,” he said.
“Mylan’s business model is not today, nor has it ever been, premised on price hikes,” spokeswoman Nina Devlin said in an e-mailed statement. “A flawed analysis focusing on a small number of products out of the more than 1,400 products Mylan sells globally and the approximatively 600 products we sell in North America is simply self-serving and misleading to investors.”
The shares were down 4.4 percent to $43.73 at 10:47 a.m. in New York. Through Thursday, they had declined 38 percent over the past 12 months, while the Standard & Poor’s 500 Health Care Sector Index dropped 2.3 percent.