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Fitch: Global Pharma's Focus on Patient Value & M&A Affecting Rating Profiles
December 17, 2015 / 10:25 AM / 2 years ago

Fitch: Global Pharma's Focus on Patient Value & M&A Affecting Rating Profiles

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: What Investors Want to Know: Global Pharma here LONDON/CHICAGO, December 17 (Fitch) Fitch Ratings says in a new report that global pharmaceuticals' focus on patient value and M&A is affecting the companies' rating profile. This comment is in response to some of the most frequently asked questions during recent investor meetings in the autumn 2015. Consolidation in the global pharma industry has gained pace during 2015 as players search for scale, efficiencies and the next blockbuster drug. Aided by access to funding at favourable rates, M&A has continued apace despite high sector valuations, demonstrating a shift in in near-term risk appetite across the sector. Fitch says this has resulted in declining debt capacity and rating headroom for Fitch-rated pharma companies, as reflected in the agency's Negative Rating Outlook for 2016. The report also says long-term fundamentals are pointing to a stable trend in the pharma industry, as an ageing and growing world population, combined with increasing innovation and global access to healthcare, balances intensifying efforts from healthcare authorities to reduce costs, improve outcomes and to focus on patient value. However, the focus on drug pricing is intensifying as US payers turn to value-based assessments, with health-care reimbursement also developing as a prominent topic in the upcoming presidential election campaign. This adds to the potential pressures on pharma companies to accelerate their strategic repositioning to defend their profitability. This contrasts with Europe where regulatory involvement in pricing has been much more significant and entrenched These and the following topics are addressed in our report published today called 'What Investors Want to Know - Global Pharma': -How does the principle of patient value shape industry drivers and incentives? -What are the key drivers behind the recent increase in M&A? -What are the specific factors affecting players in the generic and consumer health segment? -How committed are pharma companies to their ratings relative to M&A activities? -What is driving the rating differential between US and European Pharma companies? -What is Fitch's outlook on European pharma companies? -Will we experience a 2012-style patent cliff? -What challenges do you expect biosimilar producers to face? -What are the drivers of the outsourcing business model in pharma? -How do you expect the emerging-market slowdown and increased volatility to affect life science players? The report is available on or by clicking the link above. Contacts: Frank Orthbandt Director +44 203 530 1037 Fitch Ratings Ltd 30 North Colonnade London E14 5GN Robert Kirby, CFA Director +1 312 368 3147 Fitch Chicago 70 West Madison Street Chicago, Illinois, 60602 Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: Additional information is available on ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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