Was It Such A Good Idea To Jump Into Generics?

15 September 1997

Five years after some brand-name drug companies entered the genericmarket as a way to deal with both the perceived cost-control threats of US President Bill Clinton's health care reform and managed care, many are now moving out of the business.

What it came down to, said Merck & Co chairman Raymond Gilmartin, was a question of the most effective use of resources, management and skills.

Hemant Shah of HKS & Co was a bit more blunt about it, noting that the large companies did not know what they were doing. By cutting prices too hard to win market share, they wound up watching profits plummet, he added. Everyone bloodied themselves, according to David Saks of Gruntal & Co, who said that both big pharmaceutical and independent generic drug companies like Mylan and Ivax were hurt badly.

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