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In the 1970s/early 80s, almost every brand pharma company had a generic or non-branded division. Then the blockbuster drugs started to appear, with their extraordinary growth and the corresponding increase in company share prices. The stable revenue but limited growth from generic products was not the best use of corporate reources and was actually a drag on their share prices. Accordingly, the generic divisions were sold or closed.
Thirty years later, every pharma company would like to have that large stable revenue base which would mitigate the sales decline as the blockbusters lose market exclusivity. J&J has always been a diversified healthcare company with a strong consumer products base, enhanced by the purchase of the Pfizer consumer products assets. Novartis has its Sandoz division, the second largest generic group. Teva is moving to the same endpoint but starting from its position as the largest global generic company.
If the big pharma companies start to get portfolios dominated by biologicals with long periods of market exclsuivity, will we see the divestiture of the generic divisions all over again?