The patent cliff situation
Over the next six years, prescription drugs producing more than $300bn in revenues face patent expiry. As the chart below shows, each upcoming year sees more than 3% of total revenues facing end-of-lifecycle competition from generics or biosimilars. This begins with expiries totaling $52bn in 2025, rising to a peak of $104bn in 2028 – the year of Keytruda’s expiry.
These totals are noteworthy not only because of their size, but also that they are clustered so closely together. Taken together, this leaves a considerable portion of biopharma’s revenues at risk, threatening the future growth outlook.
The last time such a patent cliff struck the pharmaceutical industry was back in the early 2010s. This time it was caused by the onset of generic competition in several key drug classes, such as statins (e.g. Lipitor), antidepressants (Lexapro, Cymbalta), antipsychotics (Seroquel, Abilify, Zyprexa), and painkillers (Lyrica). The end result was sluggish sales growth that persisted for several years, as well as a notable reprioritization of R&D budgets away from these areas.
Each upcoming year sees more than 3% of total revenues facing end-of-lifecycle competition from generics or biosimilars.
Figure 1. Worldwide sales at risk from patent expiration
Source: Evaluate Pharma
