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Sourcing Generic Drugs has its own group of challenges

October 29th, 2009

Primary amongst those is that large pharmaceutical companies often spend millions of dollars protecting their patents from generic competition.

As such, it is not the easiest thing to find suppliers that provide all line items in a generic event that a retailer may want to take to auction. The U.S. Food and Drug Administration offers a one hundred and eighty (180) day exclusivity period to generic drug manufacturers in specific cases. During this period only one or sometimes a few generic manufacturers can produce the generic version of a particular drug.

It may be obvious to readers, but requires restating that the principal reason retailers even care about generic drugs is that it can save there customers and insurance companies substantial amounts of money. This does not necessarily help retailers in an era of earning comparisons when a high priced prescription drugs patent expires as sales of the generic equivalent is a negative drain on top line sales.

One benefit to retailers is that it may be relatively easy to drive lower prices of generic medicines over the long term as competition increases among producers once these drugs no longer are protected by patents or exclusivity periods.

Locating suppliers or agents for offshore suppliers is an ongoing task and fairly time consuming when hosting a generic drug event. As such, it is important to have an adequate source of suppliers that you can rely upon. It also helps if you have a list of their products in your database and associated NDA numbers to save time in the discovery process. Ask your solution provider how many generic suppliers they have in their database and what RFI information they have on file for your review.

We look forward to and appreciate your comments.

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