Despite speculation, Actavis branches out

Despite the ongoing speculation over the firm’s future, Actavis was busy in March branching out into new geographies. On 9th March 2009, the firm announced that it had entered the Irish market, with plans that will see the creation of up to 25 new jobs, and on 12th March, the firm and Japan’s ASKA Pharmaceutical signed a legal agreement to establish a joint company in Japan. Despite the headline, Actavis’ arrival in Ireland is not entirely new; a unit was set up there in 2008, and currently employs 11 people. However, Actavis’ presence in Ireland was relatively limited, and the new push will boost Actavis’ operations in the country. The firm aims to quickly ramp up its offering in Ireland in all channels, including hospital-specific, prescription and OTC drugs, and Actavis has stated that it has set double-digit growth targets for its first post-announcement year in the country, with an aim to rapidly expand its sales and marketing team in the coming months. Actavis is keen to play up its economic plus-points, noting in its announcement that its generics offer a reduction of up to 60% on the cost of drugs, ramming home the point by adding that there is a potential to save over 22 million euros (US$28.4 million) on six of the 20 new products it plans to launch in Ireland this year. Adding to the argument, Actavis was able to announce on the same day that it was launching gemcitabine in Ireland, along with other parts of Europe, on the day of patent expiry. This, the firm claims, could create savings in Ireland of 1.8 million euros (US$2.3 million), if all currently gemcitabine sales were switched to Actavis’ generic. However, whether such potential savings could be achieved is debateable; Ireland has low generic drug usage rates, and a government that has not shown much interest in changing this.

The move into Japan is entirely new for Actavis, however, and will see the firm set up business in a country it has had no previous business interests in. The agreement between Actavis and ASKA was first announced in November 2008, when the two firms concluded a preliminary agreement to establish a joint venture, to be called Actavis ASKA. Actavis will be the minority partner in the venture, holding 45% of its stocks, with ASKA holding the 55% stake. Japan has tended to be a somewhat difficult market for generic firms; it is second only to the United States in terms of healthcare spending, but the nation as a whole has always favoured the use of branded pharmaceuticals, with the result that generics have only managed to gain a toehold in the country. However, the situation has potential to change through the Japanese government, which, keen to reduce healthcare costs, introduced a generic substitution measure in April 2008, as part of an ongoing effort to increase generic market share in terms of volume. Although Actavis and ASKA have remained tight-lipped over what products will be marketed, the aim of the joint venture is for ASKA to enter the generics market using Actavis’ portfolio.

Ian Platts - Editor, World Generic Markets