Some of the biggest pharmaceutical firms in the nation are nearing the end of multibillion-dollar patent windfalls as their exclusive rights to produce Americans’ lifesaving medications and vaccines expire.
The patent cliff could spark a massive wave of new drug manufacturing mergers, leaving innovation and research on the shelf in exchange for more industry consolidation and the expansion of already bloated pharma giants — to the delight of cash-hungry venture capitalists.
When patents expire, low-priced generics and biosimilars enter the market and drive drug prices down. According to Deloitte analysts, Big Pharma could see $236 billion in revenue disappear by 2030, as exclusive patents for 190 high-earning drugs developed in the early 2000s hit their expiration date — including sixty-nine “blockbuster” medications generating over $1 billion each annually.
Meanwhile profits from new drugs hitting the market are only expected to make up for about a third of those losses. The developments could result in a whopping 46 percent decline in US revenue for the world’s top ten pharma firms over the next decade.
PitchBook reports that instead of investing in researching and developing new pharmaceuticals, pharma giants faced with patent cliffs are increasingly buying up smaller firms and their new or pending drug patents.
Drugs included in the looming patent cliff include Merck’s cancer immunotherapy Keytruda, which made the firm just under $30 billion in sales last year. In 2028, Merck’s Keytruda patent will end, spooking investors and causing the firm to shed over 35 percent of its value in the last year.
But Merck has a solution: buy another firm and take over its newer, shinier patents.
The firm has announced its plans to acquire London-based Verona Pharma in a $10 billion deal that includes the new respiratory medication Ohtuvayre, approved by US regulators just over a year ago to treat chronic obstructive pulmonary…
Auteur: Veronica Riccobene
