17.05.2010 • NewsTevahealthcare reformMerck & Co.

Teva CEO Sees Gains From U.S. Health Reform Law

Shlomo Yanai, chief executive officer of Teva Pharmaceutical Industries
Shlomo Yanai, chief executive officer of Teva Pharmaceutical Industries

The head of the world's biggest generic drugmaker predicted benefits for his company from the new U.S. healthcare reform law in the form of potential business gained through the uninsured Americans who will receive coverage.

Shlomo Yanai, chief executive officer of Teva Pharmaceutical Industries, called the new reforms that are expected to provide insurance coverage for more than 30 million uninsured Americans starting in 2014 "positive news" for his company.

"At the end of the day, we are going to see 31 million more potential customers that are going to buy Teva products," Yanai told an investor conference in New York. Yanai acknowledged that there would be more pricing pressure, but that Israel-based Teva was constantly looking to reduce its costs.

"I believe that the volume will outpace the price consequences," he said. "Therefore it is positive news for Teva."

The U.S. Congress earlier this year passed an overhaul of the healthcare system, although many of the reforms do not take effect until 2014. In the interim, there are other measures that can drive higher use of generic drugs, Bill Marth, Teva's head of North American operations, told the conference. Marth pointed to provisions that will close a coverage gap - known as the "doughnut hole" - in the Medicare prescription drug benefit for seniors.

Many drugmakers reported a crimp on first-quarter earnings due to the new reform law and expect even greater pressure next year. But some executives, such as the CEO of Merck & Co, have said the reforms will be positive for their companies over time.

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