Patent expirations for lucrative blockbuster drugs eroded third-quarter sales for top drugmakers Eli Lilly & Co. (NYSE: LLY), Bristol-Myers Squibb Co. (NYSE: BMY) and Merck & Co. Inc. (NYSE: MRK), as they faced competition from low-cost generic drugs.

Pfizer Inc. (NYSE: PFE) is set to report earnings for the past quarter on Oct. 31 and could report similar results.

Both Lilly and Bristol-Myers posted third-quarter earnings below analysts’ expectations, while Merck topped expectations with the help of its next blockbuster product -- the Januvia/Janumet franchise that together brought in nearly $1.4 billion in the quarter.

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Drug companies must constantly bring new drugs to market to keep thriving.

Sales of Lilly’s antipsychotic drug Zyprexa, which lost patent exclusivity in October 2011, fell 68 percent to $375 million in the third quarter. The drug once brought in more than $5 billion annually. Lilly will also lose patents protecting the antidepressant Cymbalta and the insulin replacement drug Humalog next year.

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Demand for Bristol-Myers’ blood clot preventer, Plavix, which had been one of the world’s best-selling drugs until its American patent lapsed in May, plunged 96 percent to $64 million.

Singulair, Merck's best-selling drug that treats asthma and allergies, lost U.S. patent protection in August and saw sales tumble 55 percent to $602 million for the third quarter. The drug is due to lose patent protection in major European countries in February.

Pfizer is expected to report a plunge in sales for its cholesterol fighter Lipitor, when the company reports next Wednesday.

Indianapolis-based Lilly said Wednesday it earned $1.33 billion, or $1.18 a share, compared with $1.24 billion, or $1.11 a share, a year earlier.

Excluding one-time items, it earned 79 cents a share. Analysts on average expected 83 cents, according to Thomson Reuters. Lilly’s world-wide revenue fell 11 percent to $5.44 billion, below Wall Street estimates of $5.62 billion.

New York-based Bristol-Myers reported a loss of $711 million, or 43 cents a share, in the third quarter, reversing profit of $969 million, or 56 cents a share, a year earlier. Excluding one-time items, Bristol-Myers earned 41 cents a share in the quarter. Analysts on average had expected 42 cents, according to Thomson Reuters. Sales fell 30 percent to $3.74 billion, 6.3 percent less than analyst projections.

Whitehouse Station, N.J.-based Merck said it earned $1.73 billion, or 56 cents per share, in the quarter, up from $1.69 billion, or 55 cents a share, a year earlier. Excluding charges totaling $1.2 billion, net income was $2.93 billion, or 95 cents a share, 2 cents more than analysts expected. Revenue, however, declined 4 percent to $11.5 billion. Analysts had expected $11.57 billion.

Shares of Merck dropped 11 cents to $46.19 in Friday midday trading. Pfizer shares were down 12 cents at  $25.49, Lilly was off 59 cents at $50.48, and Bristol Myers fell 14 cents to $33.59.