Actavis CEO: Today's generics business is doomed

Actavis CEO Claudio Albrecht sees the end of the world as we know it—the generics world, that is. The copycat-drugs business is transforming. Boundaries are changing. To stay ahead of those changes, Actavis is beefing up its portfolio of branded drugs.

The Swiss-based company has inked a deal to market QRxPharma's patented painkiller MoxDuo in the U.S. The combination of morphine and oxycodone is aimed at the $2.5 billion acute-pain market, the company said in a statement, and is expected to launch during the third quarter of 2012.

On its own, the marketing deal isn't earth-shaking, but as an indicator of Albrecht's vision for Actavis, it's a tectonic shift. "In the future, there will not be such a clear difference between innovator and generic companies," the CEO said. "The lines between the two models are blurring. The generics business as we know it today will be gone within the next 10 years."

It's just the latest example of a generics maker looking to patented drugs for growth. Though major blockbusters are falling off patent at an unprecedented rate these days, the flow of newly minted generics will soon dry up. That's going to leave generics makers with less opportunity for easy knockoffs.

Just consider Teva Pharmaceutical Industries' ($TEVA) buyout of Cephalon. The Israeli company has big ambitions—and big revenue targets—and figured that supplementing its generics sales with branded meds would be the quickest way to achieve them. More recently, Watson Pharmaceuticals ($WPI) teamed up with Amgen ($AMGN) to develop biosimilar versions of branded drugs.

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