It is a phrase used to describe the ongoing expiry of pharmaceutical patents on a range of blockbuster drugs. Between 2011 and 2012, many drugmakers will lose patent protection on their best selling products opening up the market to cheaper copy-cat drugs made in countries like India and China.
Drugs such as Lipitor, an anti-cholesterol pill manufactured by the world's largest drug maker, Pfizer. The drug was the biggest money-spinner for the company and has sales in excess of $10bn (£6.4bn) a year. But it lost its patent protection from November this year and one of the biggest generic drugmakers from India, Ranbaxy, won an approval from US Food and Drug Administration (FDA) to sell a generic version of Lipitor in the US market. Patents usually protect the companies for 20 years of exclusive sales. After that, it is open to other firms who can make cheaper copies of the original drug. Analysts say that the cost of a generic drug could be as little as one-fifth of the price.
Big pharmaceutical companies argue that a lot of money and investment goes into drug discoveries and the rise of generic copies takes away the incentives for companies to develop new drugs. It is estimated that drugs with combined annual sales of $150bn will go off-patent by 2015.
While it is great news for consumers, it will also be a big financial boost for generic drug makers. Ranbaxy has the exclusive rights to sell the copy of Lipitor for 180 days. India exports generic medicines worth US$11bn. The bulk of the drugs supplied to places in Africa by aid agencies are sourced from India.
India now has the highest number of US-FDA approved pharmaceutical manufacturing facilities outside of the US. Many firms are getting ready to benefit from the "patent cliff". Hyderabad-based Dr Reddy's Laboratories launched Olanzapine Tablets, the generic version of Eli Lilly's Zyprexa in September, 2011. They have a range of over 200 products of branded generic drugs.
Another Pfizer drug that will now be made by Ranbaxy is Caduet, which generated total annual sales of $339m in the US. A Ranbaxy spokesperson said the US is a significant market for the company, as it accounted for $600m out of total global sales which amounted to $1.87bn in 2010.
By Shilpa Kannan BBC News, Delhi
Mr King's Question:
Do you think a 20 year patent protection gives a company an unfair advantage over its competitors?