Wednesday, February 6, 2013

PFIZER & BIG PHARMAS: PATENT LOSSES

Losses of patent rights in the pharmaceutical industry prove how the biggest of dreams can turn into the worst of nightmares. And there are no exceptions. by steven philip warner

Of the biggest setbacks will be the losses of Lipitor’s patent (the largest-selling drug ever) in 2011, and that of its third-largest selling drug Celebrex in 2013; combine just these two, and you would have Pfizer’s revenues being reduced by an alarming $11.74 billion (as per research by Evaluate Pharma, the loss of revenues, post-patent expiry for a formulation, is estimated at 85%). Market reports suggest how by 2014, generic drug companies would be staging a grand stampede on 14 of Pfizer patents, representing 70% of its sales revenues; there is clear and present danger looming large over Pfizer.

There is another worry tantalising Kindler. Some of Pfizer’s new drugs have been failures or have simply underperformed. Even its most hyped-up launch three years back, Exubera, which was forecasted to become a $3 billion-a-year grossing drug by 2011, was withdrawn from the market just a year post-launch after generating an egg-on-the-face $12 million in sales in 2007, with the other drugs launched during the past two years, forecasted to return revenues of just $5 billion by 2011! “Pfizer has a number of downward revenue revisions. You have to believe board members are scratching their heads,” says David S. Moskowitz, Analyst at Friedman, Billings, Ramsey Group Inc. In short – a $50 billion-a-year Pfizer to a $15 billion-a-year skeleton; and that appears a possibility!

Pfizer is not the only one whose patent rights are in the line of fire. Well acclaimed multi-billion dollar names like GlaxoSmithKline (GSK), Novartis, Merck, AstraZeneca, Sanofi-Aventis & Bristol Myers are gearing up for a similar attack from generics (refer table above). The damage as per analysts at Datamonitor: by 2016, their loss in revenues will be about $160 billion! Worse, these patent losses will also lead to market share erosion – a study by Merck Foundation suggests how “big pharma brands typically lose 50% of their market share within a year of patent expiry.”


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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