Ann: Market Update , page-4

Governments generic policy has really hurt Sigma and makes the Arrow purchase a costly mistake both in terms of goodwill and inventory problems. Looks like the policy makers will have blood on their hands with redundancies and reduction of some of Sigmas generic manufacturing capacity. It will probably be cheaper for Sigma to import generics from India than make it here so they can compete on a level playing field.

There are likely to be loss of jobs at Alphapharm (the biggest Australian Manufacturer although foreign owned) also thanks to the aggressive and preditory actions of overseas companies who only distribute these foreign manufactured generics and therefore operate on extremely low overheads.

It is important that Sigma hangs on in the generics market for the long term. It is fortunate that they have a much broader based business though.

Blind Freddie can see Goverment policy with generic pricing has done great harm to the Australian Pharmaceutical Industry both at Manufacturing and Community Pharmacy Levels. At the Community Pharmacy Level it has been the high levels of discounting (which cannot be sustained) that have lured/forced many Pharmacy owners into adopting foolhardy discounting business models (which cannot be sustained). The public and government/taxpayer may have made some savings short term but at a great cost to the Australian Pharmaceutical Manufacturing Industry and Professional Pharmacy Practice.

Wake-up!