The Expanding Post-Patent Products Era: 4 Factors Ag Retailers Must Weigh as Generic Adoption Accelerates
As more popular active ingredients have come off patent — and new ones have been slower to gain federal approval — the industry has seen a significant shift from branded to post-patent products taking place.
Bob Trogele, CEO at Verdelis Investments/ProAgInvest LLC, predicts that the market share of generic products in the U.S. could hit 90% over the next few years.
“The reality today is that many post-patent suppliers are every bit as capable as traditional basic manufacturers,” says Brent Marek, CEO and COO at Sipcam Agro USA. “The strategic value is significant because it provides growers with high-quality alternatives to leading brands, increasing supply chain resilience through additional sources of supply, and ultimately, lowers production costs.”
This is already changing the way some major crop protection suppliers plan to conduct their business. Bayer Crop Science has announced it will curtail its product relationships with ag retailers such as Simplot Grower Solutions and WinField United, in 2027 and 2028, respectively.
“We pursue a very diligent and differentiated strategy for each of our segments, addressing different growth dynamics, farmer needs, and regional and competitive dynamics,” says Rodrigo Santos, Member of the Board of Management of Bayer AG and Head of the Crop Science Division.
According to Jeff Pritchard, CEO at Westlink Ag Group, other such designated retail partnerships might follow as multinational crop protection companies look to maximize their branded product market shares in the expanding post-patent products environment.
“Many generic products are sold at much lower prices and during tough financial times, such as farmers are facing today, that value is exponential,” says Pritchard. “In addition, most are offered into the channel at net pricing vs. loyalty bundles and rebates. As an independent retail organization, this is critically important.”
For ag retailers, there are four key points to consider when considering what post-patent products to stock:
- Product Quality and Consistency. Retailers should evaluate whether the post-patent product has reliable formulation, performance, and manufacturing quality comparable to the original.
- Supplier Reliability. Consider the manufacturer’s reputation, supply availability, technical support, and ability to provide the product.
- Economics and Margins. Retailers should compare acquisition cost, potential savings for growers, retailer margins, and the overall value proposition vs. the branded product.
- Regulatory and Stewardship Requirements. Verify that the product is properly registered and that labels, use restrictions, handling requirements, and stewardship obligations are understood and followed.
Industry experts agree that these factors can help ag retailers balance grower value, product performance, profitability, and risk as the U.S. crop protection industry’s post-patent products era expands.