Big Pharma Companies and the Threat of Expired Patents

You can’t rely on a drug for its success. While a lot of drugs are profitable, no matter how much money they’re bringing in, they’ll eventually fall to generics or biosimilars.

An inevitable threat will be putting billions of dollars in sales at risk between now and 2030 for big pharmaceutical companies. Numerous blockbuster drugs will expire this year. Known as a patent cliff (and an historic one at that), when the door opens for competitors to sell copycats of those drugs, it’s often at a much lower price. This will most likely cause revenue to fall for drugmakers, and in turn, your patients can purchase the drugs at a more affordable price.

Some companies already have replacements ready with a new generation of the same drug, while others have gone to court to fight against generics. Unfortunately, patent cliffs are unavoidable. They must replenish older top-selling drugs with new ones so they will grow sales rather than just sustain them.

When a drug loses its exclusive rights, companies are affected differently. It all depends on how much of their sales they make from the product or the type of treatment.

Drug Type Matters

A product could be one of two things. It can be a small-molecule drug, which means it’s made of chemicals with low molecular weight. Or it can be biologic, a medicine obtained from living sources such as humans or animals.

Quite a few of the biggest drugs facing upcoming patent expirations are biologics, such as Merck’s Keytruda and J&J’s Stelara. Drugs like these won’t likely bring in much revenue. However, biosimilars won’t be a threat anytime soon since they aren’t identical copies of branded biologic drugs like generics.

Biosimilars aren’t interchangeable. They can’t be directly substituted with a branded biosimilar because not all patients will react to a biosimilar in the same way they do to a biologic. This is why physicians are more wary of switching patients to them. It’s also much more costly to research and develop a biosimilar than generics. This is why biosimilar makers are less willing to sell them at discounted prices to branded copies.

Patent Cliffs Deemed Manageable

As drug pipelines improve, financial company JPMorgan sees the upcoming patent cliffs in the mid-2020s “largely manageable.” They also expect the biopharmaceutical industry’s sales to be “roughly stable” through 2030.

Buying More Time

So they don’t lose revenue, pharmaceutical companies are shifting to delay competition or extend patent protections on drugs. For instance, Merck is testing a new, more convenient version of Keytruda. This version can be injected under the skin rather than through intravenous infusion. If the new form is approved, it might secure a separate patent. This would extend Keytruda’s market exclusivity by several years.

The current form of Optivo is administered into a patient’s veins. However, Bristol Myers Squibb is testing a version that’s injected beneath the skin, and it showed promise in a late-stage trial in October. This could lead to extended market exclusivity.

Drug Price Negotiations

An additional threat to companies is Medicare drug price negotiations under the Inflation Reduction Act. However, it depends on how the policy will affect revenues. It could differ depending on when a drug loses exclusivity.

Medicare has begun price talks this year for the first round of 10 prescription medications, which include Stelara and Eliquis. In the fall, the federal government plans to announce the agreed-upon prices for those medications, which will go into effect in 2026.

The Top 10 Drugs Losing U.S. Exclusivity in 2024

  1. Sprycel (dasatinib)
    Disease: Chronic myeloid leukemia
    Company: Bristol Myers Squibb
    2023 U.S. sales: $1.45 billion
    Expected generic entry: September 2024
  2. Tysabri (natalizumab)
    Disease: Multiple sclerosis; Crohn’s disease
    Company: Biogen
    2023 U.S. sales: $998 million
    Expected generic entry: First half of 2024
  3. Myrbetriq (mirabegron)
    Disease: Overactive bladder
    Company: Astellas
    2023 U.S. sales: $640 million
    Expected generic entry: After May 2024
  4. Victoza (liraglutide)
    Disease: Type 2 diabetes
    Company: Novo Nordisk
    2023 U.S. sales: $525 million
    Expected generic entry: June 2024
  5. Emflaza (deflazacort)
    Disease: Duchenne muscular dystrophy
    Company: Emflaza
    2023 U.S. sales: $255 million
    Expected generic entry: February 2024
  6. Sandostatin LAR (octreotide acetate)
    Disease: Acromegaly; severe diarrhea from carcinoid tumors
    Company: Novartis
    2023 U.S. sales: $199 million
    Expected generic entry: 2024
  7. Dulera (mometasone furoate/formoterol fumarate dihydrate)
    Disease: Asthma
    Company: Organon
    2023 U.S. sales: $156 million
    Expected generic entry: Second half of 2024
  8. Oxtellar XR (oxcarbazepine)
    Disease: Epilepsy
    Company: Supernus Pharmaceuticals
    2023 U.S. sales: $113 million
    Expected generic entry: September 2024
  9. Venofer (iron sucrose)
    Disease: Iron deficiency anemia in patients with chronic kidney disease
    Company: CSL
    2023 U.S. sales: $90 million
    Expected generic entry: 2024
  10. Prolensa (bromfenac)
    Disease: Postoperative eye inflammation following cataract surgery
    Company: Bausch + Lomb
    2023 U.S. sales: $41.5 million
    Expected generic entry: January 2024


More articles from the June 2024 issue:

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