Drug Titans Wrestle with Approaching ‘Patent Precipice’

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Upcoming Patent Expirements Could Have Major Impact on Crucial Pharmaceuticals

In a revelation sourced from our in-house experts at The Reader Wall, it has been uncovered that the looming end of patents for major drugs by the year 2030 could considerably compromise the profits of several pharmaceutical tycoons such as Bristol Myers Squibb, Johnson & Johnson, and Merck. This forthcoming financial hazard, termed as the ‘patent cliff’, offers an opportunity to rival companies to introduce generic versions of these drugs, typically at reduced prices, leading to a dip in revenues for the original drug makers. However, on the bright side, this patent cliff indicates a beneficial development for patients who can benefit from cheaper alternatives.

The Forecast of the ‘Patent Cliff’

According to estimates by our analysts at The Reader Wall, close to $180 billion in sales might be vulnerable to patent expirations by the year 2028 for the leading 20 biopharma corporations. Key drug manufacturers who are on the edge of patent expiration include Bristol Myers Squibb with their medicine, Eliquis and Opdivo, Merck with their production, Keytruda, and Johnson & Johnson with Stelara. With Medicare drug price negotiations likely to be initiated by the Biden administration, firms whose drugs are nearing patent expiration could face additional revenue losses.

Biologics vs. Generics: A Study in Contrast

The intensity of the challenge amplifies for biologics like Keytruda, Opdivo, and Stelara. In contrast with generics, biosimilars are not exact replicas of the original drug and therefore, pharmacists cannot substitute them directly. Moreover, biosimilars necessitate higher outlays for research, development, and manufacturing which could result in them not being marketed at substantial discounts in comparison with their original versions. Our analysts at The Reader Wall have observed that historically, biosimilars have found it difficult to secure market share from their original versions, unlike generics which have been more successful in replacing small molecule drugs.

Approaches to Minimize the Impact

In the face of the patent cliff, companies are adopting various measures to minimize the negative implications. These strategies comprise creating new drug pipelines and entering into partnerships or acquisitions. The up-and-coming profit reports from Bristol Myers Squibb and Merck are predicted to provide insights into their respective strategies for the imminent years.

Anna Parker

Anna Parker, a distinguished author in the realm of business literature, brings a wealth of expertise to ReaderWall. With a profound understanding of corporate dynamics, Parker's insightful works offer invaluable insights into leadership, strategy, and organizational excellence. Explore her thought-provoking writings on ReaderWall's Business category and elevate your understanding of the business world.