Merck teams with Sun Pharma on branded generics

Merck is hooking up with India's Sun Pharmaceutical Industries to make and sell generic drugs in emerging markets. It's the latest example of a major drugmaker teaming up with an emerging-markets player to produce so-called "branded generics," or off-patent drugs labeled with a Big Pharma name. The major brand lends cachet--and higher prices--to generic products.

The deal gives Merck a broader reach in emerging markets, and it's counting on those fast-growing countries for a big chunk of its future sales. Like its multinational competitors, Merck is targeting developing nations such as India and China as growth slows in the U.S. and Europe, and big-selling drugs go off patent. As Kevin Ali, Merck's emerging markets president, said in a statement, "The joint venture will help to further strengthen our position for leadership in some of the world's fastest growing geographies."

Sun brings its expertise in generic-products development to the party, and the companies plan to develop some new knock-offs and new combination meds, Merck said in a statement. Merck's experience in regulatory matters will help get those products into various markets, and the company's "broad commercial footprint" will obviously help with marketing and distribution.

With this Big Pharma-plus-Indian-generics-maker arrangement, Merck joins several of its rivals. GlaxoSmithKline teamed up with Dr Reddy's Laboratories in a branded-generics deal in 2008, and last year, AstraZeneca set up a partnership with Torrent Pharmaceuticals to market generics under its brand. Early this year, Bayer inked a deal with India's Cadila Healthcare to sell products in Cadila's home market. 

- read the release from Merck
- see the story from India's CNBC
- get more from Reuters