GlaxoSmithKline’s shift into generic drugs by means of its partnership with Aspen reflects and develops a trend during recent years by large pharmaceutical companies to diversify into off-patent medicines.
Many of the companies have long operated small captive generic arms. These are used to market their own “tail” products whose patents are approaching their expiry dates.
But Novartis of Switzerland pioneered a trend for more ambitious expansion in 2005. It acquired Hexal of Germany for $8bn (£4bn) and merged it with its own Sandoz arm, to form the world’s second largest generics group in its own right.
Daiichi Sankyo of Japan last month announced plans to pay up to $4.6bn for control of Ranbaxy of India. The decision seems intended to give it the lead in capitalising on Japan’s small but fast-growing market for generics, encouraged by the government’s drive to reduce medicine costs.
Sanofi-Aventis of France is bidding for control of Czech-based Zentiva, emphasising profits and important growth by generics in eastern and central Europe.
And Fresenius of Germany this month published plans to pay nearly $4bn for APP of the US, striving to be a more broadly based healthcare company.