The "patent cliff" has begun. Dreaded by leading pharmaceutical companies of the West for years now, it could potentially make millions of dollars of profits for Indian companies.

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?
Marco Law
2/22/2012 03:26:17 am

I don't think a 20 year patent protection gives a company an unfair advantage over its competitors. Because when a company have their own patent, it means that the company have a idea and product that is created by themselves, So they should have the right to protect their product from being copied by their competitors for certain yesrs, if not, no one will be willing to invent new products anymore because everyone else can copy their ideas and sell it to the market for earning money, the inventor can't charge a higher price anymore and can't be the only one who own and sells the product.

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ememily
2/22/2012 03:26:37 am

i agree with this.Its because a patent owner is given protection up to 20 year against competitors who try to copy.patent benefit is ability to licence right to use the invention in return for royalties.although patent are expensive and time comsuming to obtain.but they can earn lot of money .......................

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Chantelle
2/22/2012 03:44:52 am

No it isnt. Partent is used to protect your product and you can keep produce the other product with no competitors within 20 years. No one is allow to copy the idea that you have.However, when the 20 years protection is over, the drugmakers will lose the protection on their best selling products. Its the way to opening up the market to cheaper drugmakers. Therefore, they may lose most of their profit.

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Jason Lam
2/24/2012 06:24:23 am

patent is the protection to protect produce to product up to 20 years.for a company who has patent to protect their product , which means other same type of business can't copy the ideas and process of production which has patent. however , they want to pay expensive fees to buy a patent which has lots of things to fit in. i am agree with that patent can let a compeny an unfair advantage over other company . It is because if other company know about that patent and their project is include to use that one . that company want to pay the fees for using the patent . Therefore , company which has patent will benefit with that. it may increase the profits or international care about that. Besides that , the patent protection is up to 20 years , it is a long time to protect this product which means you don't want worry about your ideas or product will stolen for someone. thats is what i think .

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Aaron
2/24/2012 02:17:56 pm

I don't think a 20 year patent protection gives a company an unfair advantage over its competitors,because a patent that every drugmakers aren't the same. So every of those are thinking different ideas that sold to the customers. while 20 years, no one can copy the product. if no patent many of them should copy the product or ideas and earn more profit. the orginal ones can't sell the product and earn any profit because everyone sell the same product.

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