Will Big Pharma Find Success in Generics?
Decision Resources, Inc, November 2011
Emerging markets are a key growth engine for the pharmaceutical industry. Because of increasing pressure from patent expiries, reimbursement restrictions, and R&D setbacks in their core branded business, many Big Pharma companies are implementing strategies to take advantage of generics opportunities in both established and emerging pharmaceutical markets.
These endeavors offer the potential of a top-line boost in revenues at a time when patent cliffs loom and innovative brand sales are at risk of generics erosion in developed markets. However, generics initiatives also pose significant challenges and market uncertainties and may well offer only a short-term gain in global revenues at the expense of more lucrative, longer-term gain from R&D innovation.
This report discusses generics opportunities and challenges facing the pharma industry and analyze the current generics strategies of Big Pharma companies in emerging and established markets.
Questions answered in this report:
- Although Novartis/Sandoz has long been committed to a generics strategy, most other Big Pharma players are recent proponents of a generics business model. What are the current generics strategies of the top pharmaceutical companies? What elements do they have in common? What are the challenges and opportunities of this approach?
- Many Big Pharma companies have engaged in deals designed to take advantage of generics opportunities. What are the major deals in this area? Who are the major players? What strategic objectives were met in these deals? Which nontraditional pharma players have been active in this area?
- The majority of Big Pharma companies are actively pursuing opportunities in emerging markets. What strategies are they using? Which companies have been particularly active? Which companies are pursuing biosimilars? What business models are Big Pharma companies using?
- Diversification into generics likely will have more staying power than previous industry diversification attempts into non-core businesses. What are the advantages of diversifying into additional pharmaceutical market segments? What diversification strategies were not successful in the past?
- Japanese patients and physicians have long been resistant to generics. What initiatives is the Japanese government using to promote generics use? How does the world’s largest generics company view the Japanese market? What strategies is Teva Pharmaceutical Industries planning for this market?
- Achieving profitable and sustainable growth is key to success in generics and in emerging markets. How does the top-line growth of global generics companies compare to that of top branded pharmaceutical companies? What are the gross and operating margins of global generics companies compared to those of the top branded pharmaceutical companies?
Scope:
Geographies: Advanced economies, Africa, Argentina, Asia Pacific, Australia, Brazil, Commonwealth of Independent States (CIS), Czechoslovakia, China, Eastern Europe, emerging markets, Egypt, Europe, France, Germany, India, Italy, Japan, Kazakhstan, Malaysia, Mexico, the Middle East, Latin America, Pakistan, Russia, South Korea, Spain, Turkey, Ukraine, the United States, Western Europe.
Pharma industry: Percentage of ethical drug sales in total revenues, impact of generics erosion on sales, top 25 innovative brands, brands facing generics erosion, stock price success of global generics companies, generics penetration in Japan, prescription drug sales of top pharma companies, gross and operating margins of top pharma companies, R&D spend as a percentage of prescription drug sales, nontraditional players.
Business opportunities: Life-cycle management, innovative R&D, established products, hybrid business model, branded generics, emerging markets, Japanese generics market, generics strategies of 8 Big Pharma companies, generics in mature markets, biosimilars, commodity generics, divestment of non-core businesses, diversification, geographic expansion, over-the-counter (OTC) segment, increasing prescription volumes, generics deals, bolt-on acquisitions, collaborations, cost cutting, restructuring, biobetters, injectables, pharmaceutical innovation, merger and acquisition (M&A), specialty generics, hard-to-formulate products, balancing risk, targeted R&D model, share repurchase, authorized generics.
Exhibits: 12 data-rich tables and figures.
Executive Summary
- Strategic Considerations
- Stakeholder Implications
Big Pharma’s Inroads into Generics
- Commodity Generics vs. Branded Generics
- Big Pharma’s Recent Strategic Generics Initiatives
Big Pharma Diversification Strategies
- Imminent Loss of Substantial Brand Sales by 2017
- Generics/Branded-Generics/Biosimilars Diversification
- Stable Business Mix Based on Ethical Drug Sales
The Generics Opportunity
- Savings in Healthcare Costs
- Brands Losing Patent Protection
- Teva’s Viewpoint
- Success of Leading Global Generics Companies
Emerging Markets: The Cornerstone of Generics Strategies
- Economic Growth
- Branded Generics
- Expanding Healthcare Markets
- Challenges
Japan–A New Generics Frontier
- Government Initiatives
- Teva’s Strategic Deals in Japan
- Nontraditional Interest in Generics
Sustaining Profitable Growth
- R&D Investment
- Margins
- Limitations
Corporate Strategies and Key Generics Deals
- Abbott Laboratories
- AstraZeneca
- Daiichi Sankyo
- GlaxoSmithKline
- Novartis
- Pfizer
- Sanofi
- Takeda Pharmaceutical
Seven Strategic Challenges
- Outlook
- About the Author
- Abbott Laboratories
- Allergan
- Altana
- Amgen
- Apothecon
- Aspen
- Astellas Pharma
- AstraZeneca
- Aurobindo Pharma
- Bayer
- Bayer HealthCare
- Bayer Zydus Pharma
- Biocon
- Biotin
- Boehringer Ingelheim
- Bristol-Myers Squibb
- Cephalon
- Claris Lifesciences
- Daiichi Sankyo
- Daiichi Sankyo Espha
- Dong-A Pharmaceuticals
- Dr. Reddy’s Laboratories
- Ebewe Pharma
- Eisai
- Eon Labs
- Forest Laboratories
- Fuji Pharma
- Fujifilm
- Generic Pharmaceutical Association (GPhA)
- GlaxoSmithKline
- Greenstone
- Guangdong Techpool Bio-Pharma
- Hanwha Chemical
- Hexal
- IMS Institute for Healthcare Informatics
- International Monetary Fund (IMF)
- Japanese Ministry of Health, Labor, and Welfare (MHLW)
- Johnson & Johnson
- KOWA Company
- Laboratoire Pharmaceutique Algerien
- Laboratório Teuto Brasileiro
- Laboratorios Kendrick
- Laboratorios Phoenix
- Lagap Pharmaceuticals
- Lek Pharmaceuticals
- Eli Lilly
- Luitpold Pharmaceuticals
- Lupin
- MedImmune
- Medley
- Merck & Co.
- Merck Biomanufacturing Network
- Merck BioVentures
- Millennium Pharmaceuticals (now The Takeda Oncology Company)
- Mitsubishi
- Mylan
- New York Stock Exchange (NYSE)
- Nichi-Iko Pharmaceutical
- Novartis
- Novo Nordisk
- Nycomed
- Onco Laboratories
- Onco Therapies
- Oriel Therapeutics
- Pfizer
- Pharmacia
- PharmaForce
- Piramal Group
- Piramal Health Solutions (India)
- Ranbaxy Laboratories
- Roche
- Sabex Holdings
- Sandoz
- Sanofi
- Sanofi-Aventis Nichi-Iko
- SciGen
- Shantha Biotechnics
- Shire Pharmaceuticals
- Simcere Pharmaceuticals
- Solvay
- Solvay Pharmaceuticals
- Strides Arcolab
- Sun Pharmaceuticals
- Taisho Pharmaceutical Industries
- Taiyo Pharmaceutical Industry
- Takeda Pharmaceutical
- Takeda Pharmaceuticals North America
- Teva Pharmaceutical Industries
- Teva-KOWA Pharma
- Toho Holdings
- Torrent Pharmaceuticals
- UCB
- Valeant Pharmaceuticals
- Watson Pharmaceuticals
- Zacks Investment Research
- Zentiva
- Zydus Cadilla
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