Pfizer has suffered a big dent in both its revenues and earnings as it has felt the fall brunt of its Lipitor cholesterol blockbuster drug coming off patent. In the first quarter this year, the pharmaceutical giant’s revenues fell 7% and its earnings by 19% after its Lipitor sales figures fell by 42% to US$1.4bn. The patent rights for Lipitor expired a few months ago, leading to competition from generics companies.
Lipitor is one of the first drugs to come off patent in what is coined the “patent cliff”. The patent cliff refers to the falling out of patent of a large number of blockbuster drugs between 2011 and 2016 without sufficient replacements coming through in the pipeline.
Paul Gershlick, a Partner and Head of Pharmaceuticals and Life Sciences at Matthew Arnold & Baldwin LLP, comments: “Many experts see the patent cliff as heralding a new era in the pharmaceutical sector as big pharma companies will struggle to cope with the massive loss of revenues that they will suffer. How they and others in the sector adapt to the new position will determine who will survive, who will thrive and who will not make it.”