Ten years ago, brand-name companies forayed into the generics business to capture revenues they otherwise stood to lose to generics competitors. They launched generic copies of their own drugs and set up subsidiaries to sell them. Their plan was to try to take share from generic firms by undercutting those firms, then assuming economies of scale would give them the pricing room they needed. All these efforts failed, and the brand name companies lost interest in the effort.
In the past two years, however, some Big Pharma companies have revitalized their generics activities. (See Exhibit 1.) On the...
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