Globalized generics plague Big Pharma

Globalization and generic drugs: There's a collection of news today that illustrates a couple of trends that have taken firm hold in the drug-sales world, two trends that are inextricably linked. One, Giant Foods, the dominant grocer in the Washington, D.C. area has leapt onto the cheap-generics express with a price of $9.99 for a three-months supply. The Wall Street Journal notes that cheap copycat meds are becoming a necessity in the retail pharmacy biz not only because they draw customers for drugs, but serve as a sort of loss (or low-cost) leader to get customers into the store--be it Target or Kroger or Wal-Mart or any of the others--to buy other stuff, too.

Of course it was Wal-Mart that started the movement. And The Huffington Post points out that Wal-Mart's move into cheap prescription drugs wouldn't have been possible without low-cost meds from India. Wal-Mart was able to start its $4 generics program because it negotiated volume deals with leading Indian companies such as Ranbaxy, Dr. Reddy's, Cipla and Sun. The Post worries about Indian quality, but there's a story about that, too; the FDA aims to set up an Indian location by year's end to monitor the mushrooming volume of food and drugs on their way to the U.S.

Globalization and generics, two forces that are taking the market by storm. No wonder, then, that Ranbaxy's CEO--who recently agreed to sell out to Japan's Daiichi Sankyo [1]--sees greater cooperation with generics makers in Big Pharma's future. If you can't beat them, join them.

- read the WSJ Health Blog item [2]
- check out the HuffPost article [3]
- see the FDA story [4] at New India Press
- find the Telegraph interview [5] with Ranbaxy's chief

Related Articles:
Sanofi makes $2 billion generics move [6]
Safeway jumps on $4 generic bandwagon [7]
Wal-Mart boosts $4 generic program [8]
Generics beat down drug price inflation [9]