Big Pharma finally warms to generic pariahs

Generics/General | Posted 20/01/2010 post-comment0 Post your comment

After years of warding off generics, large pharmaceutical companies are embracing generic drug manufacturers and vying for a share of the off-patent drugs business. Indian generic companies, once considered business pariahs, are the focus of plenty of action, Anju Ghangurde reports in Scrip News of 9 December 2009.


As he points out, Pfizer, GlaxoSmithKline and Sanofi-aventis all established ties with Indian generic firms in 2009, while a string of generic acquisition deals were done across the world. Experts think this could mark the start of a large-scale blurring of the lines between pure innovator firms and generic ones and the emergence of a hybrid model, in the mould of Novartis-Sandoz or Daiichi Sankyo-Ranbaxy Laboratories.

In March 2009, Pfizer took its first real plunge into cut-price generics, signing a broad licensing deal with India's Aurobindo Pharma. This deal was seen as part of Pfizer's efforts to counter the loss of sales that it faces when huge revenue earners, such as the lipid-lowerer Lipitor (atorvastatin), go off-patent in various markets.

Pfizer's generics unit, Greenstone, a legacy of its Pharmacia acquisition, used to be limited to selling generic versions of Pfizer's branded drugs once their patents expired. With the Aurobindo deal, however, Pfizer acquired rights to 39 generic solid oral dose products in the US and 20 in Europe, plus another 11 specifically in France. Pfizer also gained rights to 12 sterile injectable products in the US and Europe, mainly antibiotics including penicillins and cephalosporins. Pfizer's alliance with Aurobindo was further expanded in May, the same month that Pfizer acquired rights to 15 injectable products from Claris Lifesciences, another Indian company.

In July 2009, Sanofi Pasteur acquired India's Shantha Biotechnics from Mérieux Alliance. The deal valued Shantha at Euros 550 million and gave Sanofi Pasteur access to Shantha's portfolio of cut-price vaccines; several other products in development, including a rotavirus vaccine, conjugated typhoid vaccine and HPV vaccine; and manufacturing capabilities. Shantha went on to secure contracts worth US$340 million to supply its pentavalent vaccine to the United Nations.

As well as the impending expiry of patents on blockbuster drugs, other drivers behind big pharma's strategic detour into the generics arena include declining R&D productivity and pressure from governments the world over to stem the costs of health care. (see also Big Pharma’s strategic detour into generics, How easily will Big Pharma slip into generics ‘avatar’?, Big Pharma’s generics entry and generic drug prices, and Should Indian generic firms partner with Big Pharma?)


Anju Ghangurde. 2010 Scrip 100: Big pharma finally warms to generic pariahs. Scrip News/2010 Scrip 100. 2009 December 9.

Source: Scrip News

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