Endo CEO sees some pricing challenges in generic drug market

Drug pricing is the biggest commercial issue in the U.S. pharmaceutical industry, and Endo International CEO Rajiv De Silva said Monday that his company sees a mixed bag of opportunities to raise prices.

In a conference call with stock market analysts, De Silva said that Endo has about 700 generic products, and that the company had been able to raise prices on some more complicated specialty generic drugs, such as those requiring injections, and on older products for which competitors have dropped out.

Drug-company critics - including patients, doctor groups, and congressional leaders - generally question price increases, but stockholders benefit from revenue increases, and Wall Street analysis is based on that.

In reference to Endo's opportunities to raise prices, De Silva said, "We do expect [they] will continue to be spotty."

Endo's leaders operate from Malvern, though company headquarters officially are in Ireland for tax purposes.

Among Endo's products are both branded drugs with market exclusivity through patent protection and generic drugs.

Teva Pharmaceutical Industries, already the world leader in generic-drug revenue, recently agreed to buy Allergan's generics business, which will expand the gap between Teva and other generic-drug companies.

Endo moved up in the rankings to the top five by default, but its generic revenue will grow once it closes the $8.05 billion acquisition of Par Pharmaceuticals that was announced in May.

"It will be hard on the commodity side" to raise prices," De Silva said. "That's why we acquired Par. We don't see size as being a differentiating factor."

De Silva has been acquiring and divesting products and divisions since taking over Endo, and his search continues for companies or products to buy. In January, Endo completed the $2.8 billion purchase of Chesterbrook-based Auxilium, which was already cutting jobs.

"I continue to be optimistic about the deals we're looking at," De Silva said.

In part because it increased the money set aside for litigation related to vaginal-mesh implants, Endo reported a net loss of $250.4 million in the second quarter of 2015. A year earlier, it had a profit of $21.2 million, using Generally Accepted Accounting Principles.

Endo's reported revenue increased from $592.85 million in the second quarter of 2014 to $735.17 million for the same period in 2015.

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