Merck KGaA generics flourishing in France

Sales growth from the up-for-sale generics division of German drugmaker Merck KGaA has been strong with world turnover up 7% last year and earnings rising 29%. However, growth in France has been even more marked, with sales up 21% in 2006 at 480.0 million euros ($511.0 million), despite a range of price cuts decreed by the government. Earnings have not been published, but growth in this area has been less spectacular, according to Didier Barret, president of Merck Generiques, the group's generics unit in France. With market share reaching 27%, Merck has started to divide the sector with its main competitors, Biogaran (22.1%) and Sandoz (14.9%).

Mr Barret said the firm is now heading for absolute market leadership in what remains a highly competitive sector. The generics segment, meanwhile, has been driven by pharmacies with government incentives to deliver copies as substitutes for branded drugs. The level of substitution rose from 60% to 70% last year. The German group decided to sell off its generics business to refocus on innovative branded drugs after the acquisition of the Swiss Serono group (Marketletters passim).