Trade This Drug Stock as Recommended

Rx for Profits?

Cramer goes one on one with Perrigo CEO Joe Papa, to discuss how OTC store-brand product companies are competing against big brand pharma giants.

Over-the-counter drugmaker Johnson & Johnson has recently suffered a series of recalls, which Cramer said Tuesday has only helped boost sales for rival Perrigo.

In light of the recalls, Cramer said some customers are no longer trusting of Johnson & Johnson's Tylenol, Motrin or infant formula, for example. In turn, more customers are opting for the house-brand over-the-counter drugs, as produced by Perrigo . In some product categories, the Allegan, Mich.-based company has 70 percent of the store-brand market.

Having capitalized on their competitor's downfall may have helped Perrigo report a great quarter before Tuesday's opening bell. The company delivered $1.05 of earnings per share, which is a 10-cent beat on a 23.2-percent rise in revenues. It also raised guidance for the full year.

Cramer thinks Perrigo is a terrific play on the value-conscious consumer and retailer. After all, its store-brand drugs carry higher margins than the larger, national brands. In addition, he thinks is a great business that sees its stock jump after every acquisition it makes. On Jan. 20, it jumped from $66.25 to more than $71 a share on news it would buy Paddlock Labs. It made a similar jump when Perrigo bought PBM Infant Formula in March.

To learn more about what's next for this company, Cramer invited Chairman and CEO Joe Papa onto the program. Watch the video to view the full interview.

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