Patent storm hits in 2012

Date February 08, 2012

With big pharma’s annual reporting season drawing to a close, for several chief executives the 2011 results will be the last year of top line sales growth for some time, as a wave of huge patent expiries approaches.

Some, like Pfizer and Eli Lilly, which lost Lipitor and Zyprexa last year, are already feeling the pain. But for the branded industry as a whole 2012 is set to contain even bigger losses to its generic foes, with little let up until 2016. Sales of branded drugs totalling $35.1bn are at risk of being undercut by cheaper copycat versions this year, according to EvaluatePharma, up from $20.4bn last year. Nine former blockbusters that generated more than $27bn in sales in 2011 make up the bulk of those losses, topped by blood thinner Plavix in the US, anti-psychotic Seroquel and asthma therapy Singulair (see tables).

Eye of the storm

The analysis below includes only US sales, a region where the impact of patent expiry can be seen most clearly. The data illustrates annual levels of sales at risk as a result of patent expiry, so for products going off-patent in 2011, the sales from 2010 are shown, the last full year of sales unaffected by generic erosion.

Product patent expires in:  Sales at risk ($bn; annual US sales in year prior to patent expiry) 
2006  12.6 
2007  13.6 
2008  13.1 
2009  15.0 
2010  14.4 
2011  20.4 
2012  35.1 
2013  20.7 
2014  20.7 
2015  27.9 
2016  11.3 
Total  200.8 

A number of 'stays of execution' won in 2011 means this year has more than its fair share of heavy expiries.

The biggest casualty will be Sanofi and Bristol-Myers’ Plavix; generics are already denting European sales but the entry of cheaper version of the blood thinner in the US in May - delayed from last year - will really hit sales. Bristol-Myers, which booked revenues of $7bn from the drug last year, is expected to see sales more than halve this year and decline to $221m by 2016.

Takeda’s Actos also finally goes this year after winning a number of months extra protection, as does Abbott’s Tricor. The US company has effectively held generic challengers at bay for many years, but settled with Teva in 2009. With the launch of generics expected in the second half of 2012 analysts expect sales of the triglyercide lowering medicine to drop substantially this year.

Of course, the picture this year is still subject to some change. Pfizer looks like keeping Viagra generics off the market until 2019, after a surprise win in the courts last year against Teva (Pfizer wins Viagra US patent spat, August 15, 2011). That decision is likely to be appealed and a verdict should come this year.

Likewise, the chances of generic version of GlaxoSmithKline’s $5.1bn asthma drug Advair – the main patents protecting it expired last year – look slim, but will happen at some point.

Meanwhile Teva is vigorously defending its MS drug Copaxone against numerous challengers. The patent is set to expire in 2014 and court cases this year should determine if the generics giant can protect its biggest franchise for that long.

Biggest products

The table includes a number of the biologic products due to lose patent protection, but it is highly unlikely they will fall, as analysts' sales forecasts illustrate. The lack of a biosimilar approval pathway in the US is one of the main barriers; even if the FDA releases long-awaited guidance this year it is unlikely to open the flood gates.

Widely seen as the most likely biologic to fall first, Amgen's Enbrel, a recombinant TNF alpha protein, will technically lose protection this year but few see real biosimilar competition before 2016 (Amgen's Enbrel patent extension useful rather than crucial, November 23, 2011).

With numerous biologics only theoretically exposed to generics in the coming years, "at risk" sales numbers are likely over stated. But biosimilars will come. And there are still plenty of blockbuster small molecules looking over their respective patent cliffs in the coming years.

Biggest products going off-patent in 2012 and 2013 
        USA annual sales ($m) 
Patent Expiry  Rank  Product  Company  2011  2012  2014  2016 
2012  Plavix  Bristol-Myers Squibb  6,622  2,725  142  76 
  Seroquel  AstraZeneca  4,021  2,116  927  700 
  Singulair  Merck & Co  3,473  2,371  109  46 
  Enbrel  Amgen  3,458  3,447  3,281  2,874 
  Actos  Takeda  3,368  1,407  243  128 
  Diovan  Novartis  2,333  1,800  120  80 
  Lexapro  Forest Laboratories  2,143  333  60  42 
  Eloxatin  Sanofi  1,236  875  183  123 
  Viagra  Pfizer  1,008  922  909  843 
  10  TriCor  Abbott Laboratories  903  487  168  128 
2013  Cymbalta  Eli Lilly  3,086  3,406  403  47 
  OxyContin  Purdue Pharma  2,600  2,350  1,600  900 
  Epogen  Amgen  2,040  1,709  1,471  1,153 
  Avonex  Biogen Idec  1,608  1,677  1,519  1,300 
  Humalog  Eli Lilly  1,346  1,430  1,288  1,193 
  Niaspan  Abbott Laboratories  976  1,032  223  23 
  Neupogen  Amgen  959  929  800  644 
  Procrit/Eprex  Johnson & Johnson  814  757  575  368 
  Rebif  Merck KGaA  796  722  618  529 
  10  Asacol  Warner Chilcott  689  723  592  501 
All data sourced to EvaluatePharma.

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