Perrigo may have advantage over patent cliff

ALLEGAN, Mich. Most people know Perrigo Co. as a leading provider of OTC medications and nutritional products, but it also has a sizeable prescription drug business. With the approach of the patent cliff, when the number of blockbuster prescription drugs losing patent protection will decline, some factors may give Perrigo an advantage.

Because Perrigo focuses its prescription drug business on topical medications, vice president for investor relations and communication Arthur Shannon said the complexity of the business insulated it from the effects of the patent cliff.

“The impending patent cliff doesn’t really apply to our business,” he said.

IMS Health vice president for industry relations Doug Long said there could be a competitive advantage for companies that market topical medications.

“I don’t think there is much difference in patent expirations, but the topical market is less competitive than oral solids,” he said. “There are more generic players in oral solids than in topicals probably because topicals are harder to make.”

Shannon also said the company’s OTC business would help it adapt.

“As we look ahead to the foreseeable future, we see good opportunities present for new product opportunities in our OTC business,” he said.

Shannon said the $25 million purchase of Diba, which will add almost $15 million to Perrigo’s annual sales, would make it the leading manufacturer of private-label medicines in Mexico, though Diba also makes prescription drugs, including antibiotics, hormonal and ophthalmic drugs. Perrigo does not plan to market its products in Mexico through Diba, or vice versa.

Nevertheless, that might not be needed.

“We are very comfortable with the future of our generic business,” Shannon said. “Being focused on topicals, we believe we are well-positioned to continue our growth.”