Shake Up Ahead For Australia’s Generic Drugs Sector

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By Rudi Filapek-Vandyck

Pharma giant Merck is considering selling its generics business. A decision to sell will impact players in the Australian market such as Sigma Pharmaceuticals (SIP) and Genepharm Australasia (GAA), reports ABN Amro Morgans.

ABN Amro Morgans analyst Tanya Solomon believes potential buyers of Merck’s generics business include India’s third largest drug maker by value, Ranbaxy Laboratories as well as industry consolidators Novartis, Teva, a unit of Sandoz, and Actavis. And private equity firms, of course.

Merck’s generics business in Australia, Alpharpharm, currently accounts for cira 65% of total market share of the local generic drug sector. It goes without saying that any change of ownership will thus have an impact on the market and the other players.

Solomon “understands” that Ranbaxy in particular is keen to gain a greater presence in the Australian market.

If Ranbaxy would come on top of the bidding process Solomon believes this could signal bad news for Sigma and Genepharm Australasia as We Ranbaxy would likely be an aggressive competitor who does not shy away from aggressive price cutting strategies.

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