THE POWER OF BRANDS IN A GENERIC MARKET
Generics have overtaken branded pharmaceuticals in terms of market volume and this trend is expected to continue, taking into
account that the demand for cheaper essential drugs, including antiretroviral drugs (ARV), is set to grow. The trend in the
generic penetration follows the global trend, and today South Africa has a very high usage of generics, 60% in volume, 31%
In fact, in 2011, the top two companies leading the pharmaceutical market in South Africa were locally-based, generic companies,
with Aspen Pharmacare leading the way, and Adcock Ingram in second place.
Dr Guni Goolab, marketing company president of AstraZeneca South Africa
Stephen Saad, co-founder and group chief executive of Aspen, says, "This is one of the few countries in which two local companies
are ranked first and second in terms of market share by value and where multinationals do not dominate this position."
Aspen is present in 100 countries and is the leading supplier of generic medicines across Africa and continues to grow. It
completed the acquisition of the pharmaceutical division of Australian Sigma in January 2011. Today, the company represents
17% of the South African market, meaning that one out of every five scripts dispensed at a pharmacy is an Aspen script.
Saad attributes Aspen's success to strong brand awareness. "In the South African market, it is very hard to get acceptance
around generics and generic substitution. We have been successful in marketing, and in investment in manufacturing and manufacturing
facilities, to create the credibility and brand awareness that Aspen enjoys today."
Another South African-based company, Pharma Dynamics, also focuses on branded generics. Paul Anley, managing director of Pharma
Dynamics, explains, "We have always had a great faith in the generic philosophy and we have always believed that generics
would capture a significant part of the marketplace. In 2005, I remember telling Focus Reports how the South African pharmaceutical
market was a branded generic market. It still is. Hence, we focus on calling on prescribing doctors, but we of course still
call on retail, as well," Anley says.
It's a strategy that has also proven successful for Pharma Dynamics. The fastest growing pharmaceutical company in the country,
it has grown more than 30% per year since its founding.
Vicki St Quintin, chief operating officer of the Pharmaceutical Industry Association of South Africa, says, "The generic penetration
in South Africa is a growing phenomenon. For instance, for 2011, as of August, generics grew by 8% in volume, versus 0% for
Despite this growth potential, some companies have false expectations, St Quintin warns. "Some see South Africa as if it were
a developing market, out of which you could get massive growth; this is not the case, as South Africa has been a well-established
market for years."
Ian Ross-Marsh, managing director of Teva South Africa
Nonetheless, Nihar Patnaik, country manager for Dr. Reddy's Laboratories, Ltd., an Indian generics producer, sees great opportunity
for the company in South Africa. He says, "The growth potential is immense and directly proportional to the number of products
introduced. We have plans to introduce a good number of products, based on the dossiers we have been filing. The growth chances