Johnson & Johnson last week announced it would eliminate up to 4,800 jobs as it braced for competition to its drugs Risperdal for schizophrenia and Topamax for seizures and migraine headaches. Shortly after, Sanofi-Aventis announced that sales of the sleep-aid Ambien, which became available in generic form in April, plunged to $91 million in the second quarter from $420 million in the same period last year.

As patents begin to expire on brand-name medications with more than $60 billion in combined annual sales over the next five years, analysts are forecasting a golden era for generic drugs. One way the pharmaceutical industry is working to counter the generic trend is through its own generic subsidiaries and contracts for the production of company-authorized generics.

The generic trend is "good for everybody but the branded pharmaceutical companies," says Ronny Gal, an analyst for Sanford C. Bernstein. Copycats may be 30% to 80% cheaper than their branded forebears.

Read the whole story at The New York Times.

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