One of the fears that is often associated with industry consolidation is in product pricing – the fewer industry players means less competition which usually translates into higher prices.
That appears to be going on in the generic drug business, at least through the eyes of one company that does business with generics: Rite Aid.
During a conference call on its second quarter earnings, Rite Aid said margins were hurt in its pharmacy business because of generic price drug increases. That will likely be a theme for CVS as well. While these price increases may hurt the pharmacy companies, they will be good news for the generic drug makers.
