Branded generics hold promise for Big Pharma

If there's anything that folks who follow the drug biz know, it's that branded drugs are falling off the patent cliff at an increasingly rapid pace. And with drugmakers losing sales left and right to generic competition, they're doing anything and everything they can to make up the difference. One of those things is the old if-you-can't-beat-'em-join-'em strategy: Branded drugmakers are pumping up their own generics businesses.

The Economist takes a look at this trend, finding that branded generics are one of the most effective ways for drugmakers to hang onto revenue after the dreaded cliff is broached. Consider branded copycat meds as a parachute of sorts, keeping drug revenue from speeding into the abyss like Wile E. Coyote. The strategy works in rich countries, where laziness or brand loyalty can often keep patients from switching to full-bore generic versions. And it works in poor countries, because patients there often distrust copycat meds, fearing that they're counterfeit or otherwise substandard.

Which brings us to the second generics bonus: Selling copycat meds amounts to another emerging markets tactic. And as you know, emerging markets are the promised land of pharma these days, with nine of the top 20 drug markets expected to be in the developing world by 2012. And branded copycats, with their perceived higher quality, are a way to entice middle-class consumers in those markets, Dr Reddy's COO pointed out for the magazine.

Indeed, generics could be seen as partners in the push for growth these days, rather than mere rivals, Pfizer's David Simmons said. "[G]enerics are not the enemy of innovative pharma any longer," but essential allies. Of course there are pitfalls, but we'll let the article tell you about those.

- see the Economist piece