Brennan rejects generics diversification model

AstraZeneca's chief executive David Brennan has rejected the strategy of diversification into generics and biosimilars being pursued by many of the company's competitors.

Speaking at The Economist's Pharma Summit conference, Brennan reaffirmed its strategy of focusing on innovation-based medicines, believing that this will ultimately prove more profitable than the diversification strategy now being pursed by the likes of Pfizer and GSK.

Despite the dominance of generic medicines in most of the high-growth emerging markets, Brennan said AstraZeneca would not be actively marketing branded generics in all these territories.

''We will participate in the branded generics field in selected markets, but that doesn't move the [profit] needle in a big way.''

The strategy has not prevented the company from seeing double-digit sales growth from emerging markets, where AstraZeneca’s revenue grew by 12% last year to account for 13% of its total revenue in 2009.

Brennan also dismissed the potential of biosimilars to bring savings to healthcare systems, largely because of the complexity of their manufacturing and approval process.

''Generics have the potential to reduce prices to 80% - biosimilars will never do that.''

Brennan said the company was instead focused on meeting unmet medical need and working more closely with healthcare providers to provide more integrated healthcare solutions.

One example of this was a pilot project in Stockport in England aimed at reducing emergency admissions of patients with COPD.

Brennan also revealed that he had vetoed the development of a third generation proton pump inhibitor, which would have followed its blockbusters Losec and Nexium, saying payors would be unwilling to pay for new drugs in this field.