Apotex, Canada's largest generics company, contends that a patent that expired last year actually protects Plavix.

Nicholas Piramal, a generics company based in Mumbai, has invested $100 million in research and development in the last couple of years.

After that, other generics companies often pile in and prices drop.

The generics companies also contend that the safety of Prilosec when taken with other over-the-counter heartburn drugs has not been established.

It should have been a happy ending, with a Brazilian generics company making the drug for the whole of the affected part of the continent at low cost.

As generics companies develop cheaper alternatives to Schering's major products, the company could face difficulties, Mr. Franc said.

The generics companies that have changed at least some of their stripes say they had no choice.

The generics companies had revenues of $3.4 billion last year, drugstore records show.

The larger generics companies, like Rugby and Schein, are responding to the growing competitive pressures by investing in research to develop their own patentable drugs.

Teva, which is primarily a generics company, has introduced Tev-tropin.