Sandoz closes generic development center in India 
Posted by Carlos on Dec 05, 2012

Last week, Sandoz announced they are closing a number of generic product development centers around the world, including the Sandoz Development Centre near Mumbai.

A few items in this report caught our eye. First, this hat tip to the CRO industry:

While a pharma industry expert said the closure of the development centre would mean Sandoz may not be able to launch any new generic products in India going forward, Sandoz said its operations in the country will not be impacted in any way. “We absolutely will continue to launch new products through Sandoz in the future, India is a key market for our generics division as well as for Novartis. It is not necessary for a company to have its own development centre to do bioequivalence studies, those can be commissioned to any established Clinical Research Organisation.”

Having “established” CROs perform bioequivalence studies is certainly nothing new. But it’s interesting how Sandoz has decided that even in India, it’s more cost efficient to outsource instead of owning this capability internally.

Interestingly, India was not alone:

According to Shahani, the company has also closed several development centres in Latin America and the US. “This week, we already announced a significant reduction of one of our European centres,” he added.

 It certainly supports what we’ve been hearing from our colleagues in the generics space, which is that generic product development is largely an undifferentiated skill set. While it may be efficient for the mega-players to have internal development capabilities, smaller players do not need these capabilities in order to develop and launch products.
So while it’s no surprise that a generic company is increasing their work with CROs, it is interesting that a large generic company like Sandoz is moving in this direction.
So how do the CROs differentiate themselves?  We’re writing a paper which explores this question. One fo the conclusions we’re reaching is that CROs who increase their risk profile via investment in product development and out-licensing will benefit from relationships with companies like Sandoz who remain hungry for product assets, but who are less interested in developing them. 


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