Pharmaceutical companies are facing a tranche of patent expirations that could cost the industry $65 billion in revenue over the next four years, and one of the biggest losers will be Otsuka Pharmaceutical Co., the maker of America’s best-selling drug, the antidepressant Abilify.
The coming “patent cliff” is bad for companies but largely good for consumers. Once patent protection on a medicine expires, competing drugmakers are allowed to sell less-expensive, generic versions of the original.
Other companies facing significant patent expirations include Eli Lilly and AstraZeneca. But no patent expiry in 2015 will match Abilify’s. A bottle of 30 Abilify tablets cost roughly $800. The drug represents about 40 percent of Otsuka's annual revenue. The depression medicine generated $6.4 billion in sales in 2013 amid years of increasing prescriptions from doctors in the United States and Europe. The drug’s patent expiration next year will “materially and adversely” affect Otsuka, according to the company’s most recent annual report.
“Abilify’s upcoming U.S. patent expiration in 2015 means the drug will lose a massive $6.2 billion by 2019 as the result of generic competition, making it the biggest victim of the pharmaceutical industry’s current patent cliff,” said Adam Dion, an analyst at research firm GlobalData, in a Wednesday report.
But sales of Abilify have increased dramatically in recent years, thanks to a new use for the drug and a growing market. In 2007, the FDA approved the drug as a treatment for depression in conjunction with other antidepressant medications, citing two studies that showed the combinations to be effective.
Unlike schizophrenia, which affects about 1 percent of Americans, more than 6.9 percent of the adult population is affected by major depression, according to the National Institute of Mental Health. Overall, the number of Americans using antidepressants has increased dramatically in recent years, jumping from 11.2 million in 1998 to 23.3 million in 2010, according to the Guardian.
But despite its success, Otzuka’s Abilify patent in Europe expired in October, while its patent protection in Japan ends in 2016.