A couple more steps and you're hardly going to recognize Pfizer
I'm not sure that's a bad thing.
The pharmaceutical giant announced yesterday that it was licensing 40 generic drugs manufactured by an Indian company, Strides Arcolab, and Stride's joint venture with South African, Aspen. Pfizer will sell them in the U.S. for now.
Including the generics Pfizer added last year, the company has licensed more than 200 generic drugs. Add those to Pfizer's own drugs that have gone off patent, and Pfizer's established drug division now has plans to sell about 600 drugs. That's getting close to rivaling Novartis'
Licensing the drugs and letting other companies manufacture them will result in fairly low margins, but it's still probably a better move than trying to take on the research and development to figure out how to make the knockoffs. Since Pfizer already has a channel to distribute generic drugs, increasing the volume of its offerings seems like a good move.
I'd like to see Pfizer mimic this high level of licensing in its branded drug division as well. It seems like the next logical step with research and development not scaling well. Sure, Pfizer will have to give up its insanely high margins, but other companies like Wal-Mart Stores
Keep up the transition, Pfizer, and you might get this Fool to come out of his bear cave.
Investing is about looking ahead. Jordan DiPietro has some ideas for the next decade.
Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. McKesson is a Motley Fool Stock Advisor recommendation. Novartis is a Motley Fool Global Gains pick. The Fool owns shares of GlaxoSmithKline and has a disclosure policy.