There was an article in the NY Times that said that Pfizer profit declined 19% after loss of patent for Lipitor. The article points out that Pfizer is racing to reinvent itself as they are scheduled to lose 19 drug patents with a potential to lose $38.5 billion in sales. For years big drug companies have been buying up smaller companies that showed a promise of bringing a new drug to the market. They picked up where the little company left off and brought it out to the market place under the larger companies’ name. What is next for the big pharmaceutical companies?
Have you ever thought of what a patent means to a pharmaceutical company in terms of revenue? That is the companies bread and butter for the length of the patent. Generally a patent within the United States is for 20 years but this is before clinical trials are performed. The clinical trials can take between 8-18 years to perform, so in essence the manufacturer can have a monopoly for 8-12 years once the clinical trials are concluded.
In a world where it can take up to $800 million dollars for a block buster new drug to be brought to the market losing a patent can be significant. The market is soon flooded with generics and before you know it you have yourself the next Tylenol/pain reliever. The generic drugs get to coat tail on the wings of the original patent holder too and absorb the marketing and branding efforts. It is the norm now to go to the pharmacy and have your script filled with a generic, rarely does the physician write DAW (dispense as written).
Are we in a world now where we may not have any new blockbuster drugs coming to the market anytime soon? The article point out that big pharma is not investing in R & D as heavily as in the past. Pfizer has reduced its research budget from $9.4 billion in 2010 to $6-7 billion. What is on the horizon?