When a new drug is launched, the owner has the exclusive right to develop, sell and market it during the patent period, often protected by a core patent and a cluster of related patents. After this, market exclusivity is lost while generics and biosimilars are ready to storm in and take market share.
Patents for pharmaceuticals typically last 20 years, but effective market exclusivity is significantly shorter than that. Research and development takes 12-13 years from patent to market approval, reducing exclusivity to 7-8 years. At the same time, the median cost of developing a drug is on average between 700 and 1,3 billion USD, according to a study published in JAMALosing exclusivity can therefore be particularly noticeable in the pharmaceutical industry, and the term patent infringement is therefore not an entirely overdramatized epithet.
Patent plunge 2025 – 2030
Many pharmaceutical companies are now facing a tough few years as patents for 190 products, 70 of which are blockbuster drugs – with annual sales of over USD 1 billion – expire by 2030, corresponding to a loss of sales of over USD 236 billion.
Eight of the thirteen largest pharmaceutical companies, which together account for 55 percent of the global market value in the sector, could lose 30 percent or more of their revenues next year. The losses could range from $6 billion to $38 billion per company, with five of the ten largest companies at risk of losing more than half of their revenues, according to a report by Deloitte.
According to the report, small molecule drugs could lose 90 percent of the market in a few months, while sales of biologics are expected to decline by 30–70 percent in the first year due to complex production and slower market establishment.
Major companies' top salespeople are affected
In the patent piñata that will be challenged by competitors in the coming years, we find several bestsellers. Among other things Merck Lenvima whose patents expire already this year, but also their Januvia and Janumet (2026) Lynparza (2027) Gardasil (2028) as well Keytruda (2028). For Bristol Myers Squibbs part of it is about Yervoy (2025) eliquis (2026) as well Wonderful (2028). For Pfizer waiting Prevnar (2026) Ibrance (2027) Xtandi (2027) as well eliquis (2028) AstraZeneca: Farxiga (2025) as well Soliris (2025) Novartis: between (2025) Xolair (2025) Jakafi (2026) Cosentyx (2029) and finally Tafinlar (2030)
AbbVie met Olle in the gate with follow-up preparations
A example on how the patent plunge can impact revenue is AbbVies Humira which was the world's highest-grossing drug for many years, until its patent expired in 2023. Sales reached $21,24 billion in 2022, followed by $14,04 billion the following year. In 2024, revenues dipped to $8,99 billion.
The effects of lost market exclusivity can be mitigated, and this does not have to be done solely through the plethora of patent lawyers who navigate the legislative requirements on behalf of companies. AbbVie has, for example, proactively invested in follow-up preparations Skyrizi and Rinvoq, two drugs that generated $11,72 billion and $5,97 billion, respectively, last year.
The company thus appears to have been able to fend off the patent expiration on Humira quite well and states that only about 20 percent of patients have switched to biosimilars. Instead, many doctors have moved their patients to Skyrizi and Rinvoq.
Preventing the effects of the patent plunge
As BioStock recently was able to reported Merck's Keytruda topped global pharmaceutical sales for the second year in a row in 2024 with revenues of nearly USD 30 billion. Keytruda in particular is predicted to be hit hard when its patent expires in 2028, with annual revenues of approximately USD 25 billion at risk.
However, Merck has expanded the cancer indications for Keytruda to a total of 40 in the US and 30 in the EU. With over 50 programs in Phase II and over 30 in Phase III, as well as five programs undergoing regulatory review, Merck has both braces and a waist belt for the future. In addition, it has acquired eight companies in recent years and recently signed a license agreement for a promising new cancer therapy from LaNova Medicines.
Acquisition as a crash cushion
Mergers and acquisitions provide access to new innovations, technology and markets that would otherwise be difficult to reach. For example, Keytruda was originally invented by Organon in 2006, but it was only after Merck's acquisition of Organon in 2009 and their further development that it became a global bestseller.
Same thing with Humira. AbbVie's former parent company Abbot Laboratories bought Knoll Pharmaceuticals av BASF in 2000, when Humira was called D2E7. Abbott and later AbbVie, after a spin-off in 2013, showed that Humira could treat several different diseases and then built up extensive patent protection around Humira and its new indications. This extended AbbVie's monopoly in the US for six years after the main patent expired in 2016. This shows that business decisions can be as important as scientific advances, but also that patent lapsing does not have to mean the end of a company.