CORONAVIRUS: WHAT SHOULD THE DRUG MANUFACTURERS EXPECT

International rating agency Moody's Investors Service (Moody's) notes that the impact of coronavirus outbreak on the pharmaceutical companies are ambiguous since the chemical substances for the pharmaceutical market are mostly made in China.

First and foremost the demand for other innovative, branded pharmaceutical products is forecasted to decrease, as well as supply disruptions are expected.
On the other hand, the fast spread of the virus obliges the governments around the world to stock proactively the necessary medicines, including antiviral drugs. Therefore, turnovers will also rise.

For instance, Gilead Sciences, AbbVie, and Johnson & Johnson are actively participating in the development of vaccines against coronavirus. And the possibility that exactly these drugs will be purchased in the nearest future by the governments to create their own country stocks is not excluded.

At the same time, for many manufacturers of generic medicines, the source of active pharmaceutical ingredients (APIs) is China. These are just the kind of companies that becomes hostages to the situation. And the situation is compounded by the fact that it takes up to four weeks to transport the containers to Europe.

But Moody's also notes that there are several stockholders on the pharmaceutical market such as Amneal Pharmaceuticals, Mylan and Teva having their own production of API in the USA and Europe. And this becomes a significant advantage over those companies purchasing API in China.

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