Pharmaceutical Executive Europe - January 2008 - (Page 28) 28 Generics January 2008 Pharmaceutical Executive Europe India Inc. Generics companies across the world are outgrowing the role of Big Pharma’s ‘poor relation.’ Urmila Doraswami and Edwin Bailey look at how Indian companies, particularly, are thriving in this new age of consolidation. I ndian generics companies have seen a time of high profits. They have also faced litigation storms and copycat companies out to beat them at their own game. Now they’re loosening their purse strings and getting into the business of acquiring companies in the US and Europe, in what analysts are calling “the age of generics consolidation.” The generics market has shed the mantle of its humble beginnings to become a high-end growth segment of the industry. In 2006, global sales of generic pharmaceuticals were $77 billion. Europe (27%) and the US (23%) were the largest revenue producers.1 Other significant markets include Canada, Mexico and Brazil, with India and China in hot pursuit. Top generics manufacturers are becoming key market players and their business strategies have far-reaching consequences. Israeli company Teva and Switzerland’s Sandoz, the world’s two largest generics companies, have come into their own as global players. Meanwhile, some of the biggest ethical pharma companies have announced cost-cutting measures to battle the growing competition from cheaper generics medicines and more rigorous safety measures. GlaxoSmithKline, for example, recently announced the closure of manufacturing sites and job losses in a bid to save $700 million, after reporting a dip in third-quarter profits — the result of a poorer commercial performance by its diabetes drug Avandia and increased competition from generics companies. In this complex pharmaceutical market, both India and China are emerging as drug production hotspots. Aided by low production costs in both regions, these countries showed significant revenues from the sales of generics and versions of drugs whose patents are not valid in those countries. In fact, India’s high-calibre, lowcost workforce of scientists and managers — well-versed in current good manufacturing practices — sometimes make it a preferred destination, over countries such as China, for foreign pharmaceutical initiatives. Indian companies Ranbaxy Laboratories and Dr. Reddy’s Laboratories have made significant investments in the generics business, providing US consumers with low-cost versions of brandname drugs such as Prozac (fluoxetine hydrochloride) and Augmentin (amoxicillin clavulanate). They now appear to be focused on market expansion in a global playground. Consolidate to accumulate Consolidation is increasingly being seen as an option with multiple benefits in an age where generics companies themselves face competition from nose-diving prices from authorised generics. Teva and Sandoz have led a close fight for market leadership by pursuing forceful acquisition strategies. This has forced Indian generics firms “to fight fire with fire,” as Nature’s India correspondent K. S. Jayaraman, put it.2 Jean Hoffman, president of Q Street Advisors (US), comments in her article, “Generics growth in the USA and the EU: The role of India,”3 that the period from 2006–2008 has been earmarked to be fruitful for generics companies, as several high-selling products are set to lose exclusivity in major markets. http://www.urchpublishing.com/publications/general/consolidation_generic_industry http://www.qstreetadvisors.com/Hoffman%20Jean%20JGM%20India%203.1.pdf http://www.qstreetadvisors.com/Hoffman Jean JGM India 3.1.pdf
Table of Contents Feed for the Digital Edition of Pharmaceutical Executive Europe - January 2008 Pharmaceutical Executive Europe - January 2008 Contents From the Editor News and Analysis Calendar Corporate Strategy: Walking the Line Executive Profile: The Pharmacist’s Friend Q&A: An End to Drug Counterfeiting Healthcare Cost Assessment: Ready to Make NICE? Pricing and Reimbursement: Through the Reimbursement Barriers Generics: India Inc. The Mix: New Models of Excellence Last Word: Mid-size Matters Pharmaceutical Executive Europe - January 2008 Pharmaceutical Executive Europe - January 2008 - Pharmaceutical Executive Europe - January 2008 (Page 1) Pharmaceutical Executive Europe - January 2008 - Pharmaceutical Executive Europe - January 2008 (Page 2) Pharmaceutical Executive Europe - January 2008 - Contents (Page 3) Pharmaceutical Executive Europe - January 2008 - From the Editor (Page 4) Pharmaceutical Executive Europe - January 2008 - From the Editor (Page 5) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 6) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 7) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 8) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 9) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 10) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 11) Pharmaceutical Executive Europe - January 2008 - Calendar (Page 12) Pharmaceutical Executive Europe - January 2008 - Calendar (Page 13) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 14) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 15) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 16) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 17) Pharmaceutical Executive Europe - January 2008 - Executive Profile: The Pharmacist’s Friend (Page 18) Pharmaceutical Executive Europe - January 2008 - Executive Profile: The Pharmacist’s Friend (Page 19) Pharmaceutical Executive Europe - January 2008 - Q&A: An End to Drug Counterfeiting (Page 20) Pharmaceutical Executive Europe - January 2008 - Q&A: An End to Drug Counterfeiting (Page 21) Pharmaceutical Executive Europe - January 2008 - Healthcare Cost Assessment: Ready to Make NICE? (Page 22) Pharmaceutical Executive Europe - January 2008 - Healthcare Cost Assessment: Ready to Make NICE? (Page 23) Pharmaceutical Executive Europe - January 2008 - Healthcare Cost Assessment: Ready to Make NICE? (Page 24) Pharmaceutical Executive Europe - January 2008 - Pricing and Reimbursement: Through the Reimbursement Barriers (Page 25) Pharmaceutical Executive Europe - January 2008 - Pricing and Reimbursement: Through the Reimbursement Barriers (Page 26) Pharmaceutical Executive Europe - January 2008 - Pricing and Reimbursement: Through the Reimbursement Barriers (Page 27) Pharmaceutical Executive Europe - January 2008 - Generics: India Inc. (Page 28) Pharmaceutical Executive Europe - January 2008 - Generics: India Inc. (Page 29) Pharmaceutical Executive Europe - January 2008 - Generics: India Inc. (Page 30) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 31) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 32) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 33) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 34) Pharmaceutical Executive Europe - January 2008 - Last Word: Mid-size Matters (Page 35)
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