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Auburn Pharmaceuticals has made a name for itself in the non-name-brand medical world

Jeffrey Farber, 50, of Bloomfield Hills, runs a $40 million-a-year generic pill business, Auburn Pharmaceuticals in Troy, selling about 1,500 different generic medications to more than 2,000 pharmacies nationwide.

"We buy from about 50 different manufacturers, and the Federal Drug Administration and Drug Enforcement Administration have stringent rules and regulations on the pills," said Farber. "It takes a [generic] manufacturer three years to bring a drug to market at a cost of about $1 million. We follow along complying with all of the strict rules."

But the Farber family is used to the pharmaceutical format. Farber and his brother, David, of West Bloomfield, worked for their father, Bill Farber, of Franklin, at Michigan Pharmaceuticals in Ferndale, then Auburn Hills, then becoming Major Pharmaceuticals. The company was sold in 1988; and Jeffrey, who has a business degree from Western Michigan University, and David decided to leave because they felt the new owners wanted to change the nature of the business.

Bill Farber, a former pharmacist who used to mix his own compounds in his store, joined the Lannett Company Inc., a national generic pharmaceutical firm based in Philadelphia; David bought Detroit Popcorn Co. in Redford, and Jeffrey became an entrepreneur, opening Auburn in Troy in 1993.

The business now has 100 employees and occupies an 18,000-square-foot office and warehouse, plus a separate building nearby to house 40 salespeople. Auburn also recently opened a warehouse in Salt Lake City, Utah, to handle burgeoning business from the western states.

The Jewish News talked to Jeffrey Farber, president and CEO, about Auburn Pharmaceuticals.

Describe the daily operation of your business.
Our account managers use master national lists to contact prospective customers nationwide, most of them independent pharmacies rather than the large retail chains. We offer weekly specials, and orders are shipped by UPS, with customers getting free shipping if an order is $75 or more. We also sell to local hospitals, mental health agencies and some prisons in the state. I have to keep close track of pricing because prices can increase or decrease as much as 90 percent overnight. It's like the ups and downs of the stock market. I've done all of the buying up to now, but I recently hired an associate to help me.

Exactly what is a generic drug?
It's a drug sold or prescribed under the nonproprietary name of its active ingredients or under a generally descriptive name rather than under a brand or trade name.

Why don't you sell to the large chains, and why do you deal in generics only?
The large chains usually can buy directly from the manufacturer because of their huge orders. We like to help the corner drugstores, the mom-and-pop type of operations. There's such a widespread use of generics now that it's a lucrative business on its own. The average citizen wants to take advantage of the lower price of generics, mainly through insurance. Auburn is one of only 20 distributors of generic medicines left in the country.

Aren't brand name pills better than the generic version?
That's up for debate. There's a close line of distinction there. Some doctors say the brand name pill is better, but others contend there's really no difference. All medications are safe because they undergo stringent testing by the FDA and DEA.

Aren't the pharmaceutical companies opposed to generics because they hurt the business of the more profitable brand name drugs?
Basically, some of them do. Generic manufacturers wanted Plavix, which is a blood thinner, to go generic last year; but lawsuits regarding patents put a stop to it. They're going to try again next May.

Lipitor, mainly taken for high cholesterol, is due to go generic in November when patents expire. Lipitor is made by Pfizer Inc. and is one of the most used drugs in the country. But Pfizer, unlike most of the pharmaceutical manufacturers, has its own generic company. I guess they figured if you can't beat 'em, join 'em.

Who are your top generic suppliers?
Our No. 1 supplier is Teva, based in Israel, the biggest generic supplier in the world; they had $16 billion in sales last year. Our next biggest supplier is Mylan Laboratories in West Virginia.

How do you protect the drugs stored in your warehouse?
Everything is kept under lock and key, especially drugs like Vicodin, which are in a separate locked section. We also carry morphine and some cocaine, used by ENT physicians; but we keep those things locked in a cement safe.

How has the recession of the past few years affected your business?
It hasn't affected us at all. Our sales continue to rise about 10 percent each year. The pharmaceutical business is recession-proof. Recession or not, people need their medications and find ways to buy them.

The Detroit Jewish News

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