Hexal Acquisition Heralds German Generics Shake-up

Drug industry associations in Germany have claimed that the country's generics sector is now ripe for consolidation in the wake of Swiss drugmaker Novartis' acquisition of Hexal AG. Further, other major industry factors such as the government's imposition of harsh price cuts have created a growing demand for affordable off-patent drugs.

Some pharmaceutical trade associations had warned that the sector's three leading companies were forming an oligopoly controlling 50% of the market, with Novartis' Sandoz generics business effectively denied further room for growth. The firm now appears to have bought its way into the upper echelons of the generics industry, which accounted for over half of Germany's drug unit sales last year.

Meanwhile, the industry will attempt to cope with falling revenue in the short term, but prospects for the future look better as a number of major drugs come off patent in Germany. Whether smaller firms such as Stada and Betapharm will survive for long enough to befit from this trend is, however, the subject of much speculation.