After a disappointing second-quarter earnings report, along with a lowered guidance on Thursday, August 3rd, pharmaceutical company Teva Pharmaceutical Industries (NYSE:$TEVA) saw its stock plummet. On Friday, August 4th, Teva’s stock has continued to fall. As of 2:58 PM EDT on August 4th, Teva’s stock decreased by 12.29%. This was most likely due to many analysts downgrading the stock after the earnings report.

Although analyst reports doesn’t necessarily affect stocks, investors are currently in a frenzy after news arose that generic drug prices may be lowered. This was due to the U.S. Food and Drug Administration (FDA) increasing its speed in approving generic drugs, which would result in more competition, and thus lower prices. Generic drug prices could decrease by 7% to 9% this year, according to AmerisourceBergen (NYSE:$ABC).

Investors may be even more worried about Teva in the wake of lower generic drug prices because the company is in debt after acquiring Allergan’s (NYSE:$AGN) Actavis generic drug business. With Teva’s cash flow going down year-over-year, investors may be concerned about how Teva will handle this debt. The company has already decreased its dividend to 8.5 cents a share to help with its debt. However, income investors may not be too happy with this.

Besides lowering its dividend, Teva will have more difficult choices to make as it adjusts to lower generic drug prices. The company may need to cut costs and even sell off some of its assets. However, it’s also currently struggling with finding a new CEO to lead the company. As such, it’s difficult to say just when or how Teva will work to pick itself up from its fall.

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