post Friday December 2, 2011
The U.S. patent protection for Pfizer’s crown jewel, Lipitor, expired on November 30 and now the pharmaceutical giant is facing a loss of over $10 billion in annual revenue. In an attempt to recoup potential losses, the company has been busy developing strategies to compete with the slew of generics that will soon hit the marketplace. One tactic Pfizer has been considering is to try to introduce a nonprescription version of the blockbuster cholesterol pill before other generics begin to flood the market.
When the US Patent and Trademark Office (USPTO) grants a patent to an inventor, this protection excludes others from “making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States for a limited time in exchange for public disclosure of the invention when the patent is granted” 17 U.S.C. 902(a)(2). Also, since the protection granted through patents has a shorter life than other forms of intellectual property protections such as trademarks and copyrights, this makes patents more susceptible to quicker turnaround of copycatted products once the patent on an invention expires.
With the loss of Lipitor’s patent protection, Pfizer’s revenue drop could potentially cause Pfizer to be bumped from its leadership position within the pharmaceutical market, opening the doors for competitors like Sanofi or Novartis to assume the top spot.
Pfizer’s current predicament outlines the great importance of IP management, especially in pharmaceutical companies where a majority of their business revolves around patented drug sales. Generic drug companies are chomping at the bits to release a cheaper version of the cholesterol drug once the patent expires and falls into public domain where Pfizer will no longer enjoy the right of exclusion. Analysts surveyed by Bloomberg forecast that revenues from Lipitor could fall by half next year to just under $5 billion and possible fall an additional $1 – 2 billion in 2013.
If Pfizer decides against undertaking the process to develop an over the counter brand of Lipitor, we can be assured they will be heavily investing in R&D to develop their next possible crown jewel.
