Sandoz, Inc.: Don DeGolyer, President

by HCE Exchange on June 17, 2013

Sandoz, Inc., is a global generic-pharmaceutical company and the number-two player in the global -generic industry. For the past several years, it has also been one of the fastest-growing companies within the industry.

Don DeGolyer, president of Sandoz’s North American operations, said that the company’s mission is centered on providing high-quality, more-affordable pharmaceuticals to the world’s population.

With 24,000 associates worldwide, about 10 percent of whom are in North America, DeGolyer believes that Sandoz is well-positioned for a marketplace that is rapidly embracing generics.

A complex and diverse pipeline

DeGolyer’s enthusiasm for the future seems to be rooted firmly in facts.

“It’s a great time to be in the generics business,” he said. “It’s obviously a marketplace that’s continuing to evolve, but the outlook in our view is very attractive. And it’s especially attractive for those companies that are well-positioned with complex-product pipelines and differentiated products.”

He listed several reasons for this optimism. First, over the next seven years, about $160 billion of branded sales are going to fall off-patent, as their patents expire. Although the majority of this $160 billion consists of small-molecule products, $40 billion of that will be for the larger-molecule products, or originator biologics.

Second, the regulatory environment is showing solid progress. DeGolyer is hopeful that the United States will authorize a workable new generic-drug user fee in 2012.

“It’s important because right now there are more than 2,000 products down at the Office of Generic Drugs that are backlogged, so that means that there are patients in the U.S. who don’t have access to those high-quality affordable products,” he explained.

For generic drugs, federal-review times take more than 30 months, as opposed to a 10-month review cycle for the branded companies. DeGolyer would like to see the review cycles be more or less equal.

Finally, DeGolyer said that Sandoz has a biopharmaceutical development process that is constantly being refined, and the company, which is already the global leader in biosimilars, is continuing to invest in the space.

Coupling all of these reasons with an aging population who is living longer and experiencing skyrocketing healthcare costs, DeGolyer sees an opportunity for generics to increase access to medicines and decrease costs.  Currently, 78 percent of U.S. prescription volumes are generics, but generics only consume 20 percent of the dollars.

“I think we’ve got headroom there,” DeGolyer enthused. “I think that we can see it well over 80 percent generic penetration of the U.S. prescription volume.”

Developing marketplaces

Not only is Sandoz well-positioned for the future, it is also well-prepared, as it explores various therapeutic categories in which to expand. For example, the respiratory-drug industry, for health needs like COPD and asthma, is currently a $32-million branded marketplace.

DeGolyer said that 50 percent of those dollars will go generic by 2016. There are similar projections for the biosimilar marketplace. By 2015, it’s expected to be a two to three-billion dollar generic market, but by 2020, it will be 10 times that, at $20 billion. Sandoz is investing in high value and complex products, including respiratory products, so this trend presents a big opportunity for companies like Sandoz.

“That’s what we’re excited about within the generic marketplace,” DeGolyer said.

Competing and winning

So, what magic key does Sandoz possess that has enabled it to carve out a niche of envy in a marketplace of competitive intensity?

DeGolyer credits the company’s success largely to adhering to common-sense values. First, he emphasized the company’s leadership, especially on the complex-product side of the equation. As the generic industry moves out of the oral-solid phase and more into a complex-product focus around 2014, Sandoz will already be well-positioned to compete, and succeed, in the market.

Presently, it is the number-one biosimilar company, DeGolyer said, and it has a 50-percent share globally in the highly regulated markets of North America, Europe, Japan, and Australia. Sandoz is the number-one injectables company in the generic industry and has the number-one ophthalmology business in the industry, which has been bolstered by the recent addition of Alcon’s generic division, Falcon, as part of the Alcon acquisition by Sandoz’s parent company, Novartis. In 2010, Sandoz launched enoxaparin, the first generic version of the top-selling hospital drug, Lovenox®.

“It was the first one-billion dollar generic injectable in the history of the industry,” DeGolyer said, later adding, “As the industry moves to more complex therapies, we like the hand that we’re holding.”

An enterprise of quality and savings

Sandoz is not just about the numbers, though, and DeGolyer is quick to emphasize its ardent focus on quality and how that standard sweeps across the company. Sandoz has populated itself with research and scientific capabilities that are characterized by experience and knowledge, whether it’s biotechnology or oncology.

“Ultimately, what we’re focused on are patients and helping patients to breathe easier, suffer less, live longer and healthier lives,” he said. “That’s at the root of a science-based, research-based healthcare medicine company. That’s what Sandoz is.”

Sandoz is also part of an industry that has saved the U.S. healthcare system $931 billion over the last 10 years and also saves the system $3 billion each week, or, as DeGolyer describes it, real savings that benefit real patients.

“Even though these are tough economic times, generics can be a large part of the solution,” he said. “We see the U.S. generic market evolving, and we see the outlook as very attractive, especially for those companies that are well-positioned with complex-product pipelines. And we see Sandoz as very well-positioned to compete and win because of our complex-product leadership, because of our enterprise value, and because of our focus on patients.”

-by Pete Fernbaugh

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{ 1 comment… read it below or add one }

william Nichols June 29, 2012 at 4:28 pm

I can apprecate the comments made by DeGloyer in regards to the upside in business available for generics in the comming years. I do feel there is a responsability to the generics to provide medication to those uninsured or underinsured as do most of the brand companies. As a cancer survivor who has had a difficult time finding help with certain meds, I support companys that respect their social responsability.

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