WASHINGTON, DC (October 25, 2004) – Sanofi-Aventis plans to build a more than $1 billion generic business to help enhance its ability to contract with managed care, The Pink Sheet newsletter reported this week.

As the largest pharmaceutical company in Europe and the third largest worldwide, Sanofi-Aventis “has to make a strategic offer to health care providers that is not unilaterally based on high-priced innovative products,” Hanspeter Spek, Pharmaceutical Operations president, said during an October 21 earnings call.

The ability to contract across a broad product line is one of two reasons for building a generics presence, Spek said. The other is the recognition that all of Sanofi-Aventis’ current blockbuster brands will lose patent protection “during the next 10-15 years.”

Most brand name companies are once again experimenting with offering in-house generics, at least in cases where a blockbuster product foes off patent. However, Sanofi-Aventis appears to be the first major branded company to express a desire to offer a full-scale generic product line.

In the early 1990s, many brand companies pursued that strategy in response to the emergence of managed care. However, by the end of the decade, most had abandoned those efforts, according to The Pink Sheet, an authoritative prescription pharmaceutical and biotechnology newsletter (http://www.thepinksheet.com).