Generics Threats and Opportunities

After years of relatively easy blockbuster profi ts, worldwide respect and investment, and loyal customer bases, the Pharmaceutical realm has undergone a seismic shift. Today, the branded Pharmaceutical Companies are in trouble and are increasingly vulnerable to the threats posed by the competition.

And who is the competition? It's not other branded companies anymore. Generics have emerged as the primary challenger to Pharmaceutical Industry success, offering a public hungry for medication and reduced costs exactly what they want and need. Generics have exploded in the last decades, and are poised for even bigger growth. While the Pharmaceutical Industry gets squeezed by internal and external pressure, customers, physicians, governments and insurers push for more Generics.

The reasons for the Pharmaceutical Industry's vulnerability are many, but one culprit is the increasing requirements to create medication. Researching and developing a commercial prescription drug today requires an average total investment of $500 Million and 10 - 15 years of lab work, clinical trials and extensive regulatory review1. When the drug is fi nally out in the marketplace, it enjoys only a brief period of monopoly and profi t before patent expiration and plummeting market share in the face of a Generic takeover.

The situation is grim. It can seem like Pharmaceutical Companies have no recourse in the face of the lower prices and operating costs of the Generics Industry and fortunes will only continue to fade. However, options do exist for Pharmaceutical Companies to mount an effective defense strategy against the threats posed by Generics.

In this report, we examine some of these defensive strategies. We analyze the environment for Pharmaceuticals today, as well as the Generic Industry as a whole. We describe the pros and cons of legal defensive strategies as well as opportunities to expand the revenue-generating product life cycle into reformulations and over-the-counter medications.

This report looks at pricing strategies as well as company organizational changes as part of an integrated defense strategy and, to help companies make touch decisions about the best defense, we examine powerful analytics techniques and case studies.