This excerpt taken from the NVS 6-K filed Feb 8, 2006.
National conditionsfrom legislation and distribution to acceptance of genericsdiffer significantly from country to country but Sandoz has uniformly strong market positions today. Besides its No. 1 position in Germany, where penetration of generic medicines is the highest in Europe, Sandoz ranks No. 2 in the US measured by annual net sales. Sandoz also ranks among the top three in most European markets, including France and Spain, where acceptance and penetration of generics are climbing rapidly.
The US generics market is better developed than Europe: 52% of all prescriptions by volume are dispensed as generic drugs. Nevertheless, competition is intenseas is pricing pressure for standard generic products. In a recent example, prices of generic glimepiride, for treatment of type 2 diabetes, dropped 95% within a few weeks of patent expiry on the innovator product Amaryl®. The lean Sandoz sales force in the US targets key national distribution accounts, reflecting the freedom pharmacy chains have to dispense the generic version of a drug, when available.
In Germany, however, Hexal maintains an effective and well-trained sales force that calls on physicians and pharmacists, promoting mostly Hexal's umbrella-branded products. Success factors for Hexal include constant renewal of the development pipelineplus a large proportion of unique products that generate high profitability. Besides the Hexal brand, both the Sandoz and 1 A Pharma brands help to support the strong position the Sandoz division has established in Germany.
Hexal and Eon Labs have a stellar track record in product development. Sandoz expects to launch more than 80 new products in 2006 and 2007, and the pipeline has more than 250 generic medicines in various stages of testing. Even more important, a large proportion of those launches will be specialty generics such as injectable, inhaled or sustained-release formulations that are difficult to make and earn higher profit margins than commodity products.