Drug makers face $140 bn patent ‘cliff’, cheap generics to hit sales

Drug makers face $140 bn patent ‘cliff’, cheap generics to hit sales
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First Published: Thu, May 03 2007. 12 25 AM IST
Updated: Thu, May 03 2007. 12 25 AM IST
London: The world’s top drug makers face the loss of $140 billion (Rs5.74 lakh crore) in annual sales by 2016 as key product patents expire and cheap generic versions of their blockbuster medicines hit the market, according to a report on 2 May.
Independent market analysis firm Datamonitor said that the huge patent “cliff” meant manufacturers of branded products could expect to face a decade of unrelenting generic competition from companies in India and other countries.
Many firms are already feeling the heat, but industry analysts—who have long warned of a looming sales drop—say it will reach a crescendo around 2011-12, when many lose patent protection on their largest or second-largest products.
Medicines coming off patent in the pivotal US market in those two years alone include Pfizer Inc.’s Lipitor, GlaxoSmithKline Plc.’s Advair, AstraZeneca Plc.’s Seroquel, and Sanofi-Aventis and Bristol-Myers Co.’s Plavix.
The loss of $140 billion in revenues will take a large bite out of a global business that raked in sales of $643 billion last year, based on figures compiled by IMS Health.
Many investors are concerned drug firms don’t have enough new compounds moving through development to keep sales and profits growing at historic levels. These anxieties have been heightened by a number of high-profile failures of new medicines, such as Pfizer’s Torcetrapib, which was supposed to take over from cholesterol fighter Lipitor but failed in a trial last year.
Datamonitor found that many firms were working on new, improved formulations of threatened drugs in the hope that novel drug delivery mechanisms could give a new lease of life to the drugs.
One approach is to produce long-lasting tablets. But such life-cycle management is only a stopgap, says Datamonitor senior pharmaceutical analyst Alistair Sinclair. “While reformulation strategies may be effective at staving off generic competition in the short term, ultimately manufacturers need to develop truly novel drugs in order to maintain franchise and portfolio revenues in the face of generic competition.”
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First Published: Thu, May 03 2007. 12 25 AM IST
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