The Pharmaceuticals industry could be facing some big problems by the end of this decade.
Some of the biggest names in pharma, including Merck (MRK), Johnson & Johnson (JNJ), and Bristol-Myers Squibb (BMY), have products set to fall off the “patent cliff” by 2030. And this could cost the drugmakers tens of billions of dollars in sales.
Planning Is Everything
This patent cliff refers to the expiration of the patent on one or more of a company’s leading products, which also marks the point at which competitors can begin producing similar products. More often than not, this brings down prices, which is good for consumers, but less good for the pharmaceutical company’s bottom line.
Some analysts are optimistic the patent cliffs will be manageable. Many pharmaceutical companies have already begun to plan ahead by beefing up drug pipelines and looking for new drugs to acquire.
Merck and Bristol Myers Squibb are reporting earnings on Thursday and Friday, respectively. Investors may pay close attention to any updates on their plans for the years ahead.
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