Patent cliff

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patent cliff 2012-2015

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  • And with that as the introduction and background, I’d like to proceed to the panel to ask them each to take as much time as they want (as long as its under 5 minutes) to address these 2 questions:1. What do you think are the leading changes occurring in the CPU/early phase research environment? 2. What are the most pressing pressures that will impact the future of this environment?
  • Patent cliff

    1. 1. PATENT CLIFF(2012-2015)Presentation byPeruka Venkata Ramana Prasad1st Semester, MBA(Pharm)Department Of Pharmaceutical ManagementNIPER
    2. 2.  What is patent cliffGlobal blockbusters by revenue& patent expirationGlobal drug sales at risk from patent expirationFall down of companys annual revenueKey drugs in pipelineFrequency of NME approvals may come downBig pharma job cuts announced since 2009FLOW OF PRESENTATION
    3. 3. Increasing merges &acquisitionsHatch-waxman act-1984Patent exclusivity & generic entry regulationsGenerics will dominate the marketENTERING “pharmering markets”Patent warsContd..
    4. 4. It is most often described as an industry-wideexpiration of the patents of a number ofblockbuster drugs with a combined of $250 billionin annual sales will go off-patent by 2015, creatinga life-threatening situation for many of the topcompanies in pharma sectorWHAT IS PATENT CLIFFSource : Evaluate Pharma,2012
    5. 5. Other sectors, such as software and consumergoods, have patents. But they rely on rapidinnovation to maintain sales.In pharmaceuticals, stringent regulations onauthorization and marketing impose tightercontrols, higher costs and longer lead times,making drug developers more reliant on patentmonopolies to recoup their costsWhy only pharma field is more worried?
    6. 6. KEY GLOBAL PLAYERSSource : Individual company financials online 2012
    7. 7. GLOBAL BLOCKBUSTERS BY REVENUE&PATENT EXPIRATIONSource : Bioassociate Consulting & Management Ltd
    8. 8. Source : Evaluate Pharma,2012
    9. 9. Patent Expiration Of Drugs By Year
    10. 10. Source : IMS Global Insight, 2011
    11. 11. Source : IMS Global Insight, 2011
    12. 12. Source : IMS Global Insight, 2011
    13. 13. Source : IMS Global Insight, 2011
    14. 14. Global drug sales at risk from Patent ExpirationSource : Evaluate Pharma Vantage 2010
    15. 15. Forecasted revenues of few blockbuster Post-generificationSource : The Economist,2011
    16. 16. PFIZER – US$30 Lipitor , viagraEli lilly- US$13(50%rvnu) Evista , zyprexa&CymbaltaTakeda- 52%revenue loss ActosForest labs- 52%revenue loss LexaproGsk,Novartis,bms,A&Z- 14-40%revenue lossFall Down Of Companies Annual RevenueSource : Price watercoopers,2011
    17. 17. 2009-2013 annual patent losses by companySource : Bio associate Consulting & Management Ltd
    18. 18. Over $280 billion spent on R&D over last decadeSource : Bioassociate Consulting & Management Ltd
    19. 19. Key drugs in PipelineSource : Analyst and company reports,2012
    20. 20. Frequency of NME approvals may come downSource : US FDA , 20122012 : 28NME’s
    21. 21. Big Pharma job cuts announced since 2010Source : FiercePharma.com,2012, Price watercoopers 2010
    22. 22. Increasing Merges &Acquisitions2011 –Sanofi-Aventis- Genzyme- -US$20Bn. -Biotech2011 – Novartis - Aires pharm – US$250Mn -Cystic fibrosispnemonia2011 – Amgen - Biovex -- US$1Bn -Cancer vaccineOncovex2009 –Pfizer - Wyeth - US$68 -Fill pipeline,Biologics2009 –Merck -Schering-plough-US$41.1 -18NME’s inpipeline2009, 563 deals worth US$161.2Bn took place
    23. 23. Source : Pfizer,2012Contd..
    24. 24. Merges in 2012Source: business-beacon.com, 2012
    25. 25. Acquisitions in 2012Source: business-beacon.com, 2012
    26. 26. Contd..
    27. 27. 29For Innovator companies Patent term extension Provides New drug product exclusivity 30 months stay for ANDA approvalFor Generic manufacturers Created “Abbreviated New drug Application” approvalprocess for generic versions of innovator drugsFile ANDAs with bioequivalence data using innovatorproduct180 day exclusivity for first-to-fileCertification regarding each patent listed in the OrangeBook for the product: four certification optionsHatch-Waxman Act-1984
    28. 28. 30Paragraph IParagraph IIParagraph IVParagraph IIIPatent informationhas not been filedPatent has ExpiredPatent is invalid ornon-infringed byGeneric applicantPatent has NOT expiredbut will expire on aparticular dateFDA may approve ANDAimmediatelyFDA may approve ANDA onthe date that the patent expiresGeneric applicant provides noticeto patent holder & NDA filer;entry of the first filermay or may not occurANDA Patent certification Options
    29. 29. Source : Orange book
    30. 30. Patent exclusivity & Generic entry regulations
    31. 31. Contd..Source : DataMonitor,2011:US FDA,2012;
    32. 32. According to IMS Health, generics drugs accountedfor 57.7% of prescriptions dispensed five years ago, andclose to 75% todayPrice of the drugs will be reducedHowever, while the generic drug industry willcertainly benefit in the short term from the patent cliffGenerics will dominate the marketGENERICS ; US$ 100 Bn/paETHICAL MANUFACTURES ; US$ 720 Bn/paIt is estimated that by 2014 generic market will reachUS$124Bn.Source : IMS Health, 2012
    33. 33. LEADING GLOBAL GENERIC PLAYERSSource : Individual company financials 2012
    34. 34. Generics offer Drugs at low cost
    35. 35. Contd..Source : Blue cross blue shield of michigan
    36. 36. ENTERING “Pharmering Markets”Source : IMS Health,2011
    37. 37. Contd..Source : IMS Health,2011
    38. 38. INDIA has large domestic market.Highest number of US FDAApproved manufacturingUnits (74) outside the US.Clinical trial hubLess manufacturing costHigh CAGRContd..
    39. 39. PATENT WARSLaw suits & legal loopholes are the last resort beforea patent cliff for innovators30 Month marketing stay for brand name drugs as partof patent Infringement litigation, which providesimmunity against generics.Patent ever greening
    40. 40. In the end, the financial future of manypharmaceutical companies will depend on how theymanage the transition of many of their brand drugsto the generic market,as well as on their own efforts to develop noveltherapeutics and diagnostics with significant profitpotential, and to adapt to the changing globalbusiness climate.However, while the generic drug industry willcertainly benefit in the short term(upto 2015) fromthe patent cliff.CONCLUSION
    41. 41. T H A N K YO ULet’s get going ….43
    42. 42. BACK UP SLIDES
    43. 43. During 180 day exclusivity
    44. 44. AG competition typically reduces a first-filergeneric’s revenues during the 180 days of marketingexclusivity by approximately 50 percent.To prevent this loss of revenue, a generic may bewilling to delay its entry in return for a brand’sagreement not to launch an authorized generic –that is, a brand’s agreement not to compete with thegeneric through an AG – during the generic’s 180days of marketing exclusivity.
    45. 45. 7. STRATERGIES TO MINIMIZE THE IMPACT OF PATENT CLIFFMost obviously, there has been continued investment innew drug discovery and development of a “pipeline” ofpromising agents that address unmet medical needs andare profitable.Enhanced advertising over the past decade in an attemptto optimize earnings prior to patent expiration
    46. 46. A number of drug companies have suggested that they willoutsource at least some of their manufacturing to placessuch as Eastern Europe, India, and China, where drugproducts can be made at significantly less. But Qualityissues will become severe.Some pharmaceutical companies already are enteringinto agreements with generic manufacturers, licensingthem the right to sell “authorized generics” identical tobranded drugs that have gone or will go off patent.
    47. 47. In an Economist article, it is revealed thatPfizer worked with an American firm in orderto help break apart a 180 day generic exclusivityperiod, helping the company compete with oftentimes cheaper generics. These practices havehelped to boost sales by over half a billion in thefirst half of 2012, taking at least some of the painof the patent expiration out of the equation
    48. 48. Companies with the biggestcash reservesNovartis $15 billionRoche $13.5 billionJohnson & Johnson $13 billionMerck & Co. $10 billionGlaxoSmithKline $9.5 billion
    49. 49. HYDERABAD: Dr Reddys Laboratories has agreed to buythe entire equity holding of the Dutch injectable specialtygenerics manufacturer OctoPlus NV for 27.39 million euro (192 crore) in an all-cash deal.The Hyderabad-based company said on Monday thatOctoPlus expertise in making improved injectablepharmaceuticals based on proprietary drug deliverytechnologies and focus on medicine ingredients that aredifficult to formulate complement it capabilities.Source: business-beacon.com, 2012
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