|Novartis' Peter Goldschmidt|
These days, companies are increasingly looking to put both branded and generic meds under one roof. And Peter Goldschmidt, the U.S. president of Novartis' ($NVS) Sandoz unit, doesn't know why they didn't do it sooner.
As Goldschmidt told FiercePharma, there are plenty of advantages to making and selling both types of drugs--something Novartis has been doing for years.
"There are definitely synergies," he said. Just look at Glatopa, a newly approved generic of Teva's best-selling multiple sclerosis med, Copaxone. Novartis has plenty of experience in the MS arena thanks to its branded pill Gilenya, and Sandoz can leverage that experience as it brings Glatopa to market.
On top of that, in emerging markets, Goldschmidt believes companies that can "offer both and play along the value chain" make more credible healthcare players, he said. Same goes in the U.S., where Novartis often releases generics of its own products once they lose patent protection. "You know this secures 100% quality," he said. "What's better than to have the original as the generic?"
For Novartis, the strategy has worked well. Last year, the pharma giant ranked second in terms of global revenue, and Sandoz came in at No. 2 on the generics revenue list, too.
Still, though, Novartis is "the exception to the rule," Actavis ($ACT) CEO Brent Saunders told FiercePharma in January. The brand-generic hybrid is still "a new sort of beast," and one that his company--which has recently transformed itself from an Icelandic generics maker to a pharma heavyweight through a series of major M&A moves--is working to tame.
One reason? Service levels and supply chain are "incredibly important in a generics business" because of the lower margin. In pharma, they're not quite as key. But "if we bring that same attitude to the branded business, it just keeps us sharper and crisper and allows us to have terrific customer service capabilities," Saunders noted.
Actavis wants to take the brand-generics cooperation one step further, running the drugmaker as "one culture, one company" and not managing the businesses separately, Saunders said. For example, the company now includes employees from the branded side in discussions about which products it wants to target for generics R&D.
"We spend half the time talking about how to go after other programs and the other half of the time on how to defend our own programs," he said. "To have that unique perspective of being able to play offense and defense at the same time adds tremendous value."
Special Reports: The top 15 pharma companies by 2014 revenue | Top 10 generics makers by 2012 revenue - Novartis (Sandoz) - Actavis