The term patent cliff refers to the phenomenon of

patent A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention."A ...

expiration dates and an abrupt drop in sales that follows for a group of products capturing a high percentage of a market. Usually, these phenomena are noticed when they affect ''blockbuster products''—a blockbuster product in the pharmaceutical industry, for example, is defined as a product with sales exceeding US$1 billion per year. When a product’s patent expiration comes after 20 years there is a sudden diminish or decrease in a particular company’s annual income. After the expiration date the combatants then can start selling that particular drug in the market. This was a Patent Cliff. The abrupt drop in sales expected after the date of patent expiration can be estimated with the following formula:

Sales = *

where ''A'' is the peak sales value before the patent expiration and ''Y'' the years after the peak sales year (the peak sales year is considered year 0), and ''B'' is an exponent with value ''-1.032''. The formula above could be simplified for practical calculations to:

Sales = \frac

Pharmaceutical industry

For example,

Plavix Clopidogrel — sold under the brand name Plavix, among others — is an antiplatelet medication used to reduce the risk of heart disease and stroke in those at high risk. It is also used together with aspirin in heart attacks and following th ...

, Singulair,

Diovan Valsartan, sold under the brand name Diovan among others, is a medication used to treat high blood pressure, heart failure, and diabetic kidney disease. It belongs to a class of medications referred to as angiotensin II receptor blockers (ARBs ...

and Lipitor are all chemical blockbuster drugs discovered in the early 1990s, with patent expiration date falling between 2011 and 2015; and Rituxan,

Humira Adalimumab, sold under the brand name Humira, among others, is a monoclonal antibody used to treat rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, Crohn's disease, ulcerative colitis, plaque psoriasis, hidradenitis suppurativ ...

Novolog Insulin aspart, sold under the brand name NovoLog and Fiasp, among others, is a modified type of medical insulin used to treat type 1 and type 2 diabetes. It is generally used by injection under the skin but may also be used by injection into ...

and

Avastin Bevacizumab, sold under the brand name Avastin among others, is a medication used to treat a number of types of cancers and a specific eye disease. For cancer, it is given by slow injection into a vein (Intravenous therapy, intravenous) and use ...

are biologic blockbuster drugs discovered in the late 1990s, with patent expiration date between 2014 and 2019. Thus, the revenue obtained through the sales of these products is at risk of falling drastically within the years of the patent cliff, which is often seen as an opportunity for other companies to generate revenue from selling

generic Generic or generics may refer to: In business * Generic term, a common name used for a range or class of similar things not protected by trademark * Generic brand, a brand for a product that does not have an associated brand or trademark, other ...

or similar products. Pharmaceutical companies expend significant resources in seeking routes to patent extensions. For instance, one method is to develop a new delivery method for the therapeutic.

References

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Pharmaceutical industry

See also

References