Generics makers position for world domination

Drug manufacturing technologies are, let's say, a less-than-perfect fit for the processes and volumes required, meaning the industry is making do with the tools available. In fact, some of the technologies are hand-me-downs from the chemical industry, says GLG Research. But as big pharma settles into the global marketplace, customer bases are growing and API volumes are set to exceed existing equipment capacity. At the same time, top-tier companies are consolidating and dispatching API production to contractors in developing countries.

Higher volumes and fewer players "are ideal for the development and commercialization of better manufacturing technologies," write GLG analysts. Better manufacturing technologies can lower costs and improve profits, they say. And it's happening now in Teva's purchase of Cephalon, says GLG. "Developers who are highly productive, and API producers and formulators that have the best of the technologies, will have relationships and will dominate the landscape."

- here's the analysis

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