Looking to the East: GlaxoSmithKline Inks a Deal with India's Dr. Reddy's Laboratories
GlaxoSmithKline (GSK) inked a deal yesterday with the Indian generics manufacturer Dr. Reddy’s Laboratories giving it access to over 100 future generic drugs and a gateway to Asia’s emerging pharmaceutical markets. The therapeutic areas covered under the agreement include diabetes, cardiovascular, pain management, gastroenterology and oncology. Dr Reddy’s Laboratories is one of India’s largest generic drug manufacturers. Like many of its competitors, Dr. Reddy’s Laboratories also have active development programs for new biotechnology drugs and biosimilar products.
UK-based, GSK joins a growing number of pharmaceutical companies including Pfizer, Merck and others that have entered into deals with major generic drug manufacturers—or purchased smaller generics companies—to gain access to generics pipelines and an ability to compete in emerging non-branded pharmaceutical markets. Impending US healthcare reform and downward pricing pressures (resulting from increased global competition) have forced drug makers to reevaluate the role that generic drugs will likely play in future pharmaceutical revenue streams.
While generic drug makers have outstanding manufacturing capabilities, they generally lack the marketing, sales and distribution channels necessary to penetrate foreign markets and quickly ramp up drug sales. I suspect that the number of deals between pharmaceutical companies and generic manufacturers will continue to increase as many of the patents for multibillion, blockbuster drugs continue to expire in the next few years.
Until next time....
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