The article that I read has to do
with the loss that Pfizer will be having at the end of November when a patent
ends on their cholesterol drug Lipitor.
The expiration of this patent will cause a loss of $10 billion a year
for the company. Many other companies
have faced this problem and people are starting to comment on the fact that
many big pharmaceutical companies are relying mainly on big blockbuster
medicines to provide for their billion dollar revenues each year. One of the problems that the pharmaceutical
companies are facing is that there have not been many pharmaceutical
breakthroughs over the past years. This
is leading to many layoffs in the industry and outsourcing. The article comments on how the amount of
layoffs that the pharmaceutical companies have each year is much larger than
that of other industries. Another reason
the pharmaceutical company is experiencing so much loss is due to the fact that
the Food and Drug Administration is approving less and less amounts of
medications. This means that companies
are spending millions on research and development and in the end have nothing
to show for it. The money is being spent
and no revenue comes in in the end. Many
companies are seeing the need to restructure in order to make sure that a vicious
cycle does not start. If companies
continue to layoff in the area of research and development that will only cause
a decrease in the amount of drugs being produced, which will decrease profit,
which will cause more decreases in research and development. Make sure not to worry though. Even though Pfizer is set to lose a large
amount of profit in the coming years, they assure people that they have new
drugs coming out that are set to lessen the blow of losing Lipitor. The end of the patent will be coming at the
end of November of this year. It will be
interesting to see if any new articles about this topic come out when the
patent date is up.
http://www.nytimes.com/2011/03/07/business/07drug.html?pagewanted=all
Rachael Bieck
The expiration of patents is a huge topic in the pharmaceutical industry. When patent expiration happens to a company they tend to lose a lot really fast. In the past new drugs and medical developments would off set the expiration but in today's society there has not been enough research or approval of new drugs to off set this huge blow. It will be interesting to see how these major drug companies deal with these expiration's in today's market and how it will affect their companies in the years to come
ReplyDeleteI had no idea what the financial implications could be when a company loses it's patent. I had no idea that the cost could be so high.
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