Value of branded drug patent expiries at all-time high

As 2015 draws to a close, the year is on track to be one in which the value of the branded drugs losing their patent protection approaches an all-time high.



The dozens of drugs that will have lost their patent protection this year are estimated to have global sales of $44 billion a year — the highest total since $53 billion worth of medications went off patent in 2012.

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Domestically, IMS Health data showed that 2015 patent expiries account for $27.7 billion in annual sales.



While the loss of patent protection ordinarily means the market is being flooded with a slew of new generics, that has not been the case as several of the biggest expiries this year have involved biotech drugs, and so far only a single biosimilar medication — Novartis’ Zarxio, a biosimilar version of Amgen Neupogen that hit the market in early September — has been given Food and Drug Administration approval.



In a report released earlier this year, the market analysis firm EvaluatePharma estimated that only $16 billion in global sales will actually be lost to patent expiration in 2015.



Still, some of the drugs that already have seen their patents expire and a handful that went off patent in 2014 were among the best-selling medications in the United States and worldwide, and are providing generic alternatives to millions of patients whose options were previously limited solely to brand-name drugs.



For instance, AstraZeneca’s Nexium (esomeprazole), which lost its patent protection late last year, accounts for more than $5 billion in annual sales, making it attractive to generics manufacturers. In January, the Teva Pharmaceuticals USA subsidiary Ivax Pharmaceuticals was the first generic supplier to get FDA approval for its version of the drug. Subsequently, Mylan Pharmaceuticals entered the market, and Dr. Reddy’s Labs is reported to begin marketing an esomeprazole product by the end of the year.



Several generic versions of other blockbuster drugs also have been approved over the past few months. Actavis’ Alzheimer’s medication, Namenda, lost its patent protection in April. Since then, seven generic suppliers have received approval for their versions of the drug.



In a report issued earlier this year, IMS Health noted that the launch of these generics and a handful of others — that include versions of Bristol-Myers Squibb and Otsuka America Pharmaceuticals’ antipsychotic Abilify and Pfizer’s antibiotic Zyvox — would likely limit the growth in drug spending as the year wore on.



Over the next few years, IMS said the impact of patent expiries will be less severe, but will continue to affect drugs with billions of dollars in annual sales. Next year, the company said, medications with annual sales of $18.9 billion would go off patent; 2017 will see $11.1 billion worth of drugs lose their patent protection; and products with annual sales of $20.7 billion will go off patent in 2018.