危 wēi  danger

Governments in the developing and developed world are all jumping on the bandwagon and pressuring pharmaceutical companies to drop the prices of their patented drugs.  Often this is exacerbated by the promise of ‘generic’ firms offering drugs at a fraction of the price as soon as the patent expires (or occasionally even prior to that with government changes in regulation, e.g. South Africa)

机 jī opportunity

Novartis has recognized that the ‘generics’ businesses might just strengthen its position.  It has even acquired Sandoz, a large generics firm. Firstly, Sandoz gives it access to growing markets, principally in the developing world (Sandoz reported its sales in the 6 biggest developing markets were 14% higher in the first half than they were a year ago, sales in Europe were only up 3% in the same period).  Secondly, Sandoz enables Novartis to leverage its patented drug brands by selling them as ‘branded generics’ once the patent has lapsed – this is surprisingly viable because of the huge brand loyalty and inertia of doctors.

How about…

• partnering with your ‘threatening’ low-end disruptors for expertise and access to new markets