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Pharmaceutical Giants Brace for Revenue Plunge as Blockbuster Drug Patents Near Expiry

Big pharmaceutical companies such as Bristol Myers Squibb, Merck, and Johnson & Johnson are on edge as they face a looming threat that could jeopardize tens of billions of dollars in sales between now and 2030. The ominous cloud hanging over these industry titans is commonly referred to as the "patent cliff."

The patent cliff occurs when a pharmaceutical company's patents for one or more of its leading branded products expire, paving the way for competitors to introduce generic copies of those drugs, often at significantly lower prices. This situation typically results in a decline in revenue for drug manufacturers while simultaneously reducing costs for patients who gain access to more affordable alternatives.

While some pharmaceutical giants appear to be well-prepared to weather the storm of impending patent cliffs, they do so by diligently building up their drug pipelines and engaging in strategic acquisitions or partnerships with other companies, according to insights from Wall Street analysts.

Patent cliffs are an inescapable challenge for pharmaceutical companies, compelling them to replace aging, top-selling drugs with innovative medications designed not only to sustain their sales but also to foster growth. The impact of losing exclusive rights to a drug can vary significantly depending on the proportion of a company's sales derived from that particular product or the nature of the treatment it offers.

Adding to the complexity of the situation, some drugs that are nearing patent expirations will also be subjected to the Biden administration's Medicare drug price negotiations—a policy move that could pose an additional threat to these companies' revenues.

Estimates from EY suggest that the top 20 biopharma companies collectively have a staggering $180 billion in sales at risk due to patent expirations slated to occur between now and 2028. These numbers are raising eyebrows in the industry and prompting analysts like Matt Phipps of William Blair & Company to remark, "It does differ by company at this stage, and I think there are a number of products in the '25, '30 timeframe that will be major growth drivers for large biopharma companies … but all in all, there are plenty of companies that have revenue holes to plug."

As pharmaceutical giants navigate this complex terrain, the race is on to develop innovative drugs and strategies that will secure their place in the evolving pharmaceutical landscape, where patent cliffs are an ever-present challenge to overcome.

Pharmaceutical Company



2022 Sales (Billions)

% of Company's 2022 Sales

Estimated Future Revenue (Billions)





Roughly 36%

$14.9 (2030, Guggenheim)

Bristol Myers Squibb


2026 to 2028


Around 25%

$0.478 (2032, Leerink Partners)

Bristol Myers Squibb




Almost 18%

$3.18 (2032, Leerink Partners)

Johnson & Johnson


2024 (Europe), 2025 (U.S.)


Around 12%

$2.63 (2028, FactSet)

Table: A Snapshot of the Near Expiration Blockbuster Drugs

JPMorgan analysts believe that the impending patent cliffs in the mid-2020s are "largely manageable" for the biopharmaceutical industry, foreseeing stable sales through 2030. Merck, in particular, has made significant progress in addressing the patent expiration of its key drug, Keytruda, which is set to happen in 2028. Merck's CEO, Robert Davis, stated during the JPMorgan Health Care Conference that the company anticipates over $20 billion in sales from oncology drugs by the mid-2030s, doubling its previous forecast from the same period last year.

Merck's improved outlook includes promising developments such as three antibody-drug conjugates resulting from a licensing agreement with Daiichi Sankyo, as well as a personalized cancer vaccine in partnership with Moderna, which has shown positive results in mid-stage trials when combined with Keytruda for treating deadly skin cancer. Additionally, Merck has raised its revenue projection for cardiometabolic drugs to approximately $15 billion by the mid-2030s, up from the earlier guidance of $10 billion.

Merck perceives the impending patent expiration of Keytruda as a "hill, not a cliff." The company's strategy is centered on minimizing the impact of this event and swiftly returning to growth. This positive outlook indicates Merck's commitment to navigating the challenges posed by patent cliffs and maintaining its competitive position in the pharmaceutical market.


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