Expired patents mean big losses for Big Pharma
A pharmacist counts pills to fill a prescription.
Jeremy Hobson: We're getting a look at the health of the pharmaceutical industry today with earnings from companies like Johnson & Johnson, and Forest Laboratories. Analysts are seeing a bit of a downer from the drug companies this quarter.
Marketplace's Jennifer Collins reports.
Jennifer Collins: Patents are about to expire on several blockbusters: Plavix, Zyprexa and cholesterol drug Lipitor. That last one is the bestselling drug in the world.
Lipitor advertisement: I trust my heart to Lipitor.
But millions of people may start trusting their hearts to generics once Pfizer loses that patent.
Chris Bowe: Thus they meet what they call a patent cliff.
Analyst Chris Bowe says Pfizer's sales of Lipitor could drop by half in as little as a year. So Pfizer and other pharmaceutical companies need to have a stream of drugs in development. Miller Tabak's Les Funtleyer says, these days, there's been a shortage.
Les Funtleyder: Drugs are going generic faster than pharmaceutical companies can create new ones.
So what they can't create, they buy.
Funtleyder: Which is why you've seen a lot of acquisitions.
And Funtleyder says that is likely to continue.
I'm Jennifer Collins for Marketplace.