"I think Merck was a company that didn't bother with AG's."
That's just not correct. For example, MRK entered into AG arrangement with Dr. Reddy for generic Zocor back in 2006 and did so again with Watson in early 2008 when generic Fosemax was launched.
Just for the record and not be argumentative, but I disagree with the many of the underlying assumptions posted here, especially by zipjet, regarding the economics of launching an AG.