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Pharma Nightmare: Falling off the Patent Cliff

By Johanna Gibson, David Pearce, Jeremy Phillips and Ilanah Simon.

A press release, dramatically entitled "Pharma Industry Enters Critical Phase as Patent Cliff Looms Large, Hastening Consolidation", paints a bleak picture of confidence in the short-term future of the proprietary pharma sector. The headline news is that

? More than 8 in 10 (82 per cent) of those working in the drugs industry believe big pharma will be unable to innovate sufficiently from within to replace blockbuster drugs going off-patent;
? 97 per cent expect that patent life extensions will continue to grow in importance as companies seek to squeeze out revenue streams as blockbusters come up against the patent cliff;
? Almost 7 in 10 (67 per cent) predict substantial acquisition activity within the next two years.

All this is according to the latest annual life sciences research from UK-based international IP practice Marks & Clerk. Its findings, based on a survey of 381 executives [how the Kat dislikes this word: can we have a clue concerning job descriptions please?] across the pharmaceutical and biotechnology sectors, shows that big pharma is becoming increasingly reliant on patent term extensions to safeguard essential blockbuster revenue ahead of a likely ?make-or-break? round of company acquisitions. Not surprisingly, there is some gloom at the challenge facing originator pharmaceutical companies, since large numbers of their blockbuster drugs are set to come off-patent between now and 2014.

The IPKat's not sure that originator pharma companies will be more interested in securing supplementary protection certificates and paediatric extensions than they have been in the past, since they have always been highly interested in them -- but he agrees that they will be more dependent on the income stream they provide. However, the more valuable those income streams are for their owners, the greater is the gain to be secured by challenging their validity per se as well as seeking to undermine the patents on which they are based, so this is probably good news for pharma patent litigators [For further reading and current news on SPCs, see The SPC Blog].

Full post as published by IPKat on May 16, 2010 (boomark / email).