Big Pharma’s Patent Cliff Puts China Front and Center

For pharmaceutical firms, watching the lucrative patents on their top-selling drugs expire has long been part of the business cycle. There’s enormous pressure to find ways of covering the shortfall. For the first time, China has something to offer. Its prolific biotech companies are now in the mix as a potent remedy for the upcoming so-called “patent cliff” facing the industry.

A new blockbuster drug can generate tens of billions of dollars a year when it first goes to market. Each therapy typically gets two decades of patent protection. However, when that period is over, competitors are allowed to release generic or biosimilar medicines. It’s great news for patients. But the loss of exclusivity can erase huge amounts of revenue. Over the next five years, about $314 billion in sales will be affected, according to Evaluate, a pharmaceutical intelligence solutions provider.