[constant thinker]

This article shows that the largest pharmaceutical company, Pfizer, is taking significant steps to maintain its profits and competitiveness. According to the article, Pfizer is slated to potentially lose 41% of its sales as of right now to generic competition. I'd take that number with a grain of salt, but I'm pretty sure that a number of patents are set to expire soon. Also their sales are stagnating.

I'm hoping this industry stays strong because I'm hoping to possibly get into the R&D portion of it one day.

[Donaldson Tan]

Maybe it's time for the big pharma companies to acquire the generic manufacturers..

[Custos]

I don't think so. The generics business is a high volume low margin game, with shareholder returns much lower than the traditional double digit returns from big pharma. Diversifying into generics or vitamins or OTC products would more than likely reduce the stock value of the big pharma companies. The history of diversified companies is not great (although there are some spectacular contrary examples, for example GE).  Maybe it's time for shareholders to revise their growth expectations of phama companies.

[Donaldson Tan]

Not really.. the big pharma companies could gang up together to create an investment vehicle to buy out all the medium-sized generic manufacturers.

[Custos]

Not really.. the big pharma companies could gang up together to create an investment vehicle to buy out all the medium-sized generic manufacturers.

To what end? The only reason to do that would be to try to artificially keep prices high for drugs that have come off patent. But in doing that new generic players will come into the market (especially from China and India). If it's purely for investment reasons, why is it better for a pharma company to invest in generic drugs rather than investing in say real estate or banking? Most investors would rather see them spend the money investing in their own proprietary pipeline of new drugs (or buying out biotechs with promising Phase III results  )