Big pharmaceutical firms face a looming “patent cliff”, with approximately $180 billion in annual revenue set to lose exclusivity by 2027–28. Landmark drugs like Merck’s Keytruda and Pfizer and Bristol Myers Squibb’s blockbuster treatments will soon confront generic or biosimilar competition. Merck’s shares have dropped around 35% amid investor concern. To mitigate losses, companies are ramping up acquisitions—Merck is reportedly nearing a $10 billion deal to acquire respiratory drug specialist Verona Pharma—and building large patent thickets while acquiring early-stage biotech firms. Firms are also exploring partnerships in emerging markets like China. Regulators are scrutinizing these tactics more closely, but biologics’ complexity could temper revenue erosion. Still, the primary takeaway is clear: traditional reliance on blockbuster patents is weakening, and innovation pipelines must accelerate to sustain growth. The coming period represents a pivotal strategic inflection point for the industry.
Looming Patent Cliff Puts Big Pharma Under Pressure
