U.S. Pharmaceuticals Peer Comparison

...Sector Outlook Stable: Fitch Ratings view s the Outlook for the U.S. innovative pharmaceutical sector as Stable. Advancing pipelines, moderate organic grow th and manageable patent expirations remain supportive of the sector's operating profile. Pricing pressure exists in select therapeutic categories but is generally not onerous for innovators. Conversely, pricing pressure is significant in the U.S. generic drug market. Recent generic price deflation is due to market forces, encouraged by regulation seeking to increase competition through accelerated generic drug approvals and consolidation among generic drug purchasers. While the pricing environment is stabilizing, low -to-mid-single digit declines are still expected through 2019. Deflation may moderate thereafter, as some manufacturers elect to exit certain product lines, reducing capacity and allow ing greater pricing pow er for the remaining competitors. Stable Cash Flow s: Moderate grow th and relatively stable margins should drive...

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