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Hard economic times may spell good times at Perrigo Co, the largest U.S. maker of store-brand generic medicines, as consumers hunt for savings.

“The economy is certainly an important influence for making the case for store brand,” Perrigo Chief Executive Officer Joseph Papa said in an interview.

“(Consumers) still have a headache,” Papa said. “They’re trying to figure out how they can save a dollar, and they’re moving more and more to store brands.”

With a 70 percent market share, Perrigo dominates store-brand or private-label medications which are sold with generic names under the labels of drug chains and other stores. For example, a Perrigo-made product might be sold under as acetaminophen instead of the brand name Tylenol.

The store-brand market in the United States has been thriving, says Papa. While total over-the-counter and nutritional sales have climbed 2.8 percent in 52 weeks through June, store brand sales jumped 13 percent, he said.

The weak economy, he said, is one of the favorable factors supporting Perrigo’s forecast of 7 percent to 13 percent earnings per share growth for its 2010 fiscal year, which runs through June. The CEO said the company feels “very good” about the forecast, which calls for earnings of $2-$2.12 per share.

The Allegan, Michigan company, whose revenue rose 16 percent to $2 billion in its most recent fiscal year, is also counting on new product launches to drive growth this year.

Among the launches is a store-brand version of Schering-Plough Corp’s Miralax laxative, which has annual sales of more than $200 million. The company is awaiting U.S. approval for its version, but Papa said he expects the company to be able to launch it “sometime in the next several months.”

It may launch a version of Mucinex, a decongestant sold by Reckitt Benckiser, and expects to start selling a version of Johnson & Johnson’s Monistat vaginal infection product in the next six to 12 months.

Papa said investors may be underestimating the fiscal 2010 opportunity in other new store brand launches, including pain relievers; cough and cold medicines; and nicotine products.

“That, I think, is probably what people are most misunderstanding … is the magnitude of the number of new product launches that we will have in fiscal year 2010,” Papa said, although he declined to specify how many of these launches there will be.

Perrigo’s U.S. store-brand version of the omeprazole acid reflux drug, known by the brand name Prilosec, has been a key drug for the company but it may soon see competition from a version sold by India’s Dr. Reddy’s Laboratories.

Still, Papa said, omeprazole “will be a very large important product for us several years into the future,” noting Perrigo has held onto more than 80 percent of the market share for the store brand version of the allergy drug Zyrtec despite facing competitors.

Papa said the company is exploring acquisitions to expand geographically or broaden its store-brand offerings.

Perrigo is No. 1 in the store-brand markets in Mexico and England. Further expansion in Europe, Latin America, South America and Asia “all seem equally appealing,” Papa said. 

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