Entry and Exit Decisions in Alternative Pharmaceutical Generic Markets

The aim of this paper is to analyze the dynamics of entry and exit in pharmaceutical generic markets under current high uncertainty. Incentives to permanence are assessed in terms of the expected NPV of labs, the portfolio of generics and the degree of diversification in other related activities or same activities in other markets. Given a range of values for these variables, we present two fuzzy decision support systems in order to determine the incentives to permanence of a generic lab under a stable and a growth scenario. We consider the case of an open market where global players diversify into alternative national generic markets and we discuss the economic sense of recent mergers and acquisition moves in the generics business.