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BW Businessworld

Power Play

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US-based $50-billion Pfizer will be a whisker away from being world’s top generics company if it wins its reported $4-billion bid for Germany’s No. 2 generics firm Ratiopharm. In 2008, Pfizer and Ratiopharm clocked revenues of $10 billion and $2.5 billion, respectively from generics. Teva, the world’s top generics company, and Iceland’s Actavis have also reportedly made a play for it. The $13-billion Teva has an aggressive plan to touch $31 billion in revenues by 2015. If it loses Ratiopharm, it will look elsewhere to feed its hunger.  
But more importantly, Pfizer, which derives a bulk of its revenues from under-patent drugs, will also become a much more influential player in the global generics arena. This is bound to accelerate the trend towards cooperation rather than confront-ation between generics and innovators. Already, as the latter attempt to defend their fast-expiring patents, and generics try to cap litigation costs, more patent lawsuits are being settled between the two in the US. In parallel, more innovators are entering product sou-rcing deals with gene-rics makers or doing outright acquisitions in a clear sign of their greater interest in generics. With Pfizer gaining dominance in the generics space, the hand-shaking is bound to increase.
(This story was published in Businessworld Issue Dated 22-03-2010)

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