Hitesh portfolio

Hi Gautham,
Alkem lab IPO document explains this difference very well.I am copy pasting the details below,hope it helps. Hitesh bhai,do you have any view on alkem lab?I spoke to a few doctor ,MR friends and they recommended their products as very good.They also seem to be a leader in Domestic pharma and on the cusp of strong growth in US and ROW.
———————copied from Alkem IPO Doc———–
Generic Products
“Generic” pharmaceutical products are pharmaceutical products that are not protected by patents. These are drugs marketed by different companies but which contain the same active ingredients. The costs for generics manufacturers to develop their products and obtain regulatory approval to market and sell such products are considerably lower than for patented drug manufacturers. As a result, such companies can offer the same product at a significantly reduced price. The introduction of generic products offers consumers a choice between patented or branded products and their generic counterparts, resulting in greater competition and generally lower prices for
drugs in the market.

Largely due to the increase in generic drug products, when a drug goes off-patent, its price typically falls. For example, generics of “blockbuster” drugs (generally drugs having sales of more than US$1 billion) are susceptible to significant competition as a large number of players seek to enter the market within a short period of time. On the other hand, in the case of “niche” drugs, prices may not erode as much due to lower competition, as products for niche pharmaceutical segments are typically more complex and difficult to manufacture.Generics that are marketed under different brands by different companies are known as “branded generics”. “Pure
(or otherwise known as non-branded) generics” are not marketed under a brand, but rather use a generic or nonproprietary name. Producers of generic drugs (branded as well as pure) may sell their products in unregulated/semi-regulated markets until regulatory recognition of patents in those markets. In regulated markets,generic drugs may be sold when the patent for a particular product has expired or has been found invalid or unenforceable.

In a branded generics market, the same drug will be marketed by different pharmaceutical companies under their own brands. Brand promotion and marketing are important factors to gain competitive advantage in a branded generics market. Marketing and sales set-ups are important in this category. Consequently, pharmaceutical companies in branded generics markets expend considerable resources on building brands and strengthening relationships with doctors, often involving a large sales force. In a typical branded generics market, the first pharmaceutical company to launch a generic version of a particular product tends to take a significant share of the
market. For this reason, the speed at which a generic product comes on the market is critical for obtaining market share and maximizing revenues for a product. Generic products with popular brands typically possess significant market share and can command large pricing premiums over similar products marketed under different, lesser known brands.

In a pure generics market, trade and health maintenance organizations are the key influence in the dispensing decision (as opposed to doctors in a branded generics market). Low-cost manufacturing and an efficient distribution network, coupled with strong relationships with wholesalers and distributors, are the key drivers to succeeding in such markets. Pharmaceutical companies in pure generics markets do not require a full-fledged marketing force to liaise with doctors. Instead, smaller sales teams are employed to build relationships with wholesalers and distributors of the generic products.