The patent cliff is a multi-year phenomenon that will continue to shape the pharmaceutical landscape over the next few years. However, 2012 undoubtedly represented the nadir of Big Pharma's generic challenge, acting as clear focal point.
Much of this focus can be attributed to the loss of US market exclusivity for Pfizer's Lipitor in late 2011. Revenues from the statin drug – the industry's highest selling product of all time – declined from $9.4 billion in 2011 (some $3.5 billion below its peak annual performance) to $3.5 billion in 2011; a dramatic drop of around $5.9 billion.
To put into context the severity of this 'generic hit,' Lipitor's annual decline in revenue over 2011-12 was comparable to the combined sales growth recorded across the industry’s five largest growth drivers during the same period.
Furthermore, a second product – Bristol-Myers Squibb and Sanofi's Plavix – suffered a decline in annual sales in excess of $5 billion over 2011-12. The schizophrenia/bipolar disorder treatments Zyprexa (Eli Lilly) and Seroquel (AstraZeneca) were other notable growth resistors due to patent expiration, as were Novartis' hypertension treatment Diovan and Merck & Co.'s oral asthma treatment Singulair.
Together, the 10 largest sales growth resistors over 2011-12 delivered a net decline in sales of $22.5 billion – comparable to the levels of annual prescription pharmaceutical sales generated by the likes of Eli Lilly, AbbVie or Bristol-Myers Squibb. By comparison, the industry's 20 largest sales growth drivers over 2011-12 delivered a net expansion in revenue of $13.4 billion.
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