That’s THREE really big, globally active, generic pharmaceutical companies.

As of this morning, Teva has agreed to acquire the Actavis global generic pharmaceutical division of Allergan — for a massive $40.5 billion (give or take a few hundred million here or there still under discussion).

It’ll take a while for this deal to be completed of course. Teva had been trying to acquire Mylan, one of its major competitors, but Mylan had demonstrated no interest at all (and is itself trying to acquire a smaller company called Perrigo).

The three really large global generic companies remaining after the deal goes through will be

  • Teva
  • Sandoz (a division of Novartis)
  • Mylan

But there are other players still “in the game” (e.g., Pfizer through its Global Established Products division and its acquisition of Hospira).

The opportunities for any further major consolidation in the generics business are probably now limited because other potential candidates for acquisition are a good deal smaller than the “big three”). However, if the promised “split” of Pfizer goes through, you can bet that one of the above-mentioned “big three” will be likely to try and take advantage of the opportunity to expand again. However, there is still the possibility that a relative outsider will be able to become a major player in the biosimilars marketplace (to which Sandoz and Teva are already deeply committed).

Interestingly, the US health insurance business is now down to just THREE major players too:

  • United Healthcare
  • Aetna (after it completes its acquisition of Humana)
  • Anthem (after it completes its acquisition of Cigna)

We knew that the Affordable Care Act was going to have some major ramifications on healthcare in the USA … but those who bet well on consolidation of the health insurance and generic pharmaceutical marketplaces have a lot of chips they’ll be able to cash in soon!


About Mike Scott

Mike Scott is a highly experienced health care communications strategist with Calcium. He is also a board member of three different patient advocacy organizations. To get more detail, see his profile on LinkedIn.

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