Summary
Aurobindo's approval of Terbinafine tablets is already entering a saturated market as the tenth entrant. Accordingly, with strong pressures from other Indian manufacturers as Dr Reddy's and Wockhardt, this has very little profit margin potential. Such reduced pricing is aiding the wholesalers as McKesson (MCK) or Cardinal (CAH) by negotiating an even lower acquisition cost. Reduced pricing is already evident, as Terbinafine has been on Walmart's (WMT) $4 generic list for some time.
Analysis
The approval on Terbinafine tablets is no head turner. This makes Aurobindo, the tenth entrant in a list of generic manufacturers catering to this saturated market. Already, Harris Pharmaceuticals and Wockhardt have reduced pricing, more competitive than Aurobindo's. Wholesalers have negotiated very cutthroat contracts with such manufacturers, undercutting much availability of slightly more expensive suppliers. Additionally, many retailers have already placed this on their discounted program - as Walmart's (WMT) and Target's (TGT) $4 or $10 generic program.
To sway heads, Aurobindo would need to move away from the "commodity-type" products to more unique single source generics to command any significant profit
