Alpharma Braces Itself For Generic Industry Shift

As a direct result of the changes that are taking place in the US generics market, Alpharma says that its US pharmaceuticals division is experiencing lower sales volume and lower pricing compared to last year. The firm now expects sales volume to continue to fall at least through to the end of the current year, and it will adjust production accordingly, resulting in higher unit production costs.

Alpharma says that the generic pharmaceutical market is experiencing a rapid fundamental shift in industry distribution, purchasing and stocking patterns. This shift is resulting in accelerated price erosion and significant volume swings as inventories are adjusted. Programs recently initiated by national wholesalers have fueled the trend of lower prices.

At the same time, according to Alpharma, these programs, along with a number of other industry-related dynamics, are rapidly reducing the market share of distributors. They have represented an important but declining part of the firm's US pharmaceutical customer base but it is now seeing a sharper drop in this class of business, largely due to new wholesaler programs.