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If there was ever a question about the importance of intellectual property (IP) and patent protection to the pharmaceutical industry, it is about to be answered. The world’s top drug makers are shuffling towards the edge of a patent cliff that may cost the industry £70 billion in annual sales by 2016, as key product patents expire and cheap generic versions of their blockbuster medicines hit the market.
The industry will no doubt survive the fall, but patents are likely to become even more important to corporations, as they reformulate their strategies and become more competitive and acquisitive. Those companies that spend the time and money up front on patent strategy and awareness are likely to emerge the strongest.
HIGH PROFILE EXPIRIES
Even before the global economic recession hit, the pharmaceutical industry was beginning to steady itself for an uncertain future. Perhaps the most conspicuous of these high profile expiries will be the core patents protecting the bestselling drug of all time: Pfizer’s cholesterol-lowering medicine, LipitorTM. In November 2011, these patents will expire, and industry experts predict that, within the first year, generic competition will cost Pfizer approximately 80 per cent of the £8 billion it receives annually from global sales of the drug. This would put the current combined value of the two or three core patent families protecting it at approximately £6.5 billion a year – the equivalent to approximately 20 per cent of Pfizer’s total sales for 2008. |
