Market Watch | Russ Britt
But
the 376-page study from London-based GlobalData says this cliff will be more
widespread than the $95 billion drop in sales the industry experienced from
2010 to 2013. And the industry is better equipped to deal with its
consequences.
“Companies
are still intent on retaining market share and retaining their historical
presence in these areas,” said Joshua Owide, GlobalData’s director of
health-care industry dynamics.
Owide
says that this coming patent cliff will be spread out among a wider array of
companies, and over a longer time. That gives companies more time to develop
new drugs, as well as implement whatever internal measures they need to have in
place to prepare for the patent expirations.
“I
think there’s a lot of optimism in general,” he said.
Still,
several companies will feel the sting. Perhaps the biggest hit will be absorbed
by Otsuka Holdings Ltd. which sells the anti-psychotic drug Abilify.
Bristol-Myers Squibb also markets the drug with Otsuka.
Abilify’s
patent was due to run out earlier this year, but it got an extension, and is
now due to expire in 2015. GlobalData estimates Otsuka will lose $6.2 billion
in annual sales due to competition from generics by 2019. That drug, a top
seller last year, is used to treat schizophrenia, bipolar disorder and major
depression.
A
number of other drugs treating central nervous system disorders are due to hit
patent cliffs over the next half-decade, as well as several cardiovascular
drugs such as AstraZeneca’s Crestor. Crestor accounted for $5.2 billion
in sales during 2013. The drug was the fourth top seller last year, and its
patent is due to expire in 2016.
AstraZeneca
lost its patent on Nexium, a gastrointestinal drug, this year, and is due to
lose exclusive rights on its pulmonary medication Symbicort next year.
And
Pfizer Inc. has exclusive rights on its
fibromyalgia drug Lyrica until 2018.
Owide
says it may be difficult for companies to maintain the hefty net margins
they’ve been maintaining for some time. Many of the industry’s bigger players
report margins of 20% or more, which is more than double what most companies
are able to achieve.
“It’s
become a victim of its own success, because shareholders now expect a certain
level of [profitability],” he said.