Pfizer, Aurobindo in Deal to Sell Generic Drugs
Tue, 03/03/2009 - 5:29am
By LINDA A. JOHNSON AP Business Writer TRENTON, N.J. (AP) — Pfizer Inc. will begin selling dozens more generic drugs in the U.S. and Europe through new deals with an Indian generic company, part of a recent trend of brand-name drugmakers expanding in a growing generics market. Pfizer's Greenstone subsidiary already sells more than 300 Pfizer medicines that have lost patent protection but still brought in a combined $10 billion last year. Those include former blockbusters Zoloft for depression, Norvasc for high blood pressure, Zithromax for bacterial infections and Medrol for inflammatory and immune conditions such as asthma, arthritis and lupus. Now the established products unit at New York-based Pfizer, created as part of its reorganization last fall into more-focused business units, will announce Tuesday that it has reached agreements with Aurobindo Pharma Ltd. to produce and sell drugs that have lost patent protection in the United States and Europe. The deal includes 39 pills that will be sold in the U.S., 20 of which will also be sold across Europe, and 12 injectable medicines such as antibiotics. Pfizer will handle the marketing after licensing each product from Aurobindo, which will handle all the steps to get approval to make generic versions, as well as manufacture them. "We're targeting by 2013 to generate more than $1 billion in incremental sales for the company through portfolio expansion," David Simmons, president and general manager of the established products unit, told the The Associated Press in an interview. He said Pfizer also is considering how best to market all those off-patent drugs in emerging markets such as China, Russia and India. Suddenly, several brand-name drugmakers are getting into generics through acquisitions, and others have done it by licensing rights to a generic company on a case-by-case basis, said analyst Les Funtleyder of Miller Tabak & Co. "It's not a bad move" and fits into Pfizer's recent diversification strategy, said Funtleyder. "It actually behooves Pfizer to bolster its generic unit because generics are going to play a big role in health care reform." President Obama has said he favors greater use of generic drugs, which can cost 30 percent to 80 percent less than equivalent brand-name medicines and already account for about two-thirds of all prescriptions sold in the United States. Swiss drugmaker Novartis AG has sold generics for years through its Sandoz unit. Last week, French drug giant Sanofi-Aventis SA completed its $2.3 billion acquisition of Czech pharmaceutical firm Zentiva N.V., which makes and sells generic drugs in Central and Eastern Europe. Sanofi also is reportedly the frontrunner, ahead of Britain's GlaxoSmithKline PLC, in a bidding war for Indian generic company Piramal Healthcare Ltd. Last November, Japan's Daiichi Sankyo Co. bought a majority stake in Ranbaxy Laboratories Ltd., India's largest pharmaceutical company and one of the world's biggest generic makers, for $4 billion. Meanwhile, there's a similar trend in the market for biotech drugs, which are made in living cells and until now have had no generic versions allowed in the U.S. Once Obama was elected in November, drugmakers began expecting that new rules to enable approval for generic biotech drugs would follow. By December, Merck & Co. said it was launching a new division called Merck BioVentures to make both new and generic biotech drugs, and Eli Lilly and Co.'s chief executive said his company was considering delving into generic biotech drugs, too. Simmons, the Pfizer executive, noted that the marketed for off-patent prescription drugs is now about $270 billion but is expected to nearly double to more than $500 billion in the next five years. Pfizer wants part of that growth. It made its first deal with Aurobindo, one of the world's biggest generic drugmakers, last July, to bring five other drugs to the U.S. market, including the widely used antibiotic amoxicillin. Last year, Medrol, anti-anxiety drug Xanax, injectable contraceptive Depo-Provera and two other medicines marketed by the Greenstone subsidiary got beefed-up marketing and other extra attention to see whether their generally steady decline in annual revenue could be stopped. Three with decreasing sales had sales jumps last year, one with flat sales in 2007 saw 6 percent growth last year and one saw a small sales increase from 2007 nearly double.