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.