Big Pharma braces for biggest patent cliff in decades as $500 billion in drug sales face risk

The global pharmaceutical industry is approaching its biggest wave of patent expirations in decades, putting hundreds of billions of dollars in blockbuster drug sales at risk and forcing some of the world's largest drugmakers to find new sources of revenue before cheaper competitors enter the market.

More than $500 billion in projected annual global drug sales could face loss of patent protection by 2033, according to estimates from biopharmaceutical market research firm Norstella. The approaching “patent cliff” encompasses some of the industry's most lucrative cancer, cardiovascular, immunology and diabetes treatments, including Merck's Keytruda, Bristol Myers Squibb and Pfizer's Eliquis and Novo Nordisk's Ozempic. The consequences extend beyond Big Pharma: generic and biosimilar manufacturers, including Indian drugmakers, are preparing to compete for business that could become available as exclusivity ends.

Keytruda faces crucial 2028 deadline

Among the biggest exposures is Merck's Keytruda, the cancer immunotherapy that was the world's bestselling medicine in 2025. The drug generated nearly $32 billion in sales last year and is used across more than 20 types of cancer, but key US patent protection is due to expire in 2028. Merck therefore faces the challenge of replacing an exceptionally large revenue stream as biosimilar competition approaches.

Bristol Myers Squibb is confronting its own patent pressures. Its blood thinner Eliquis, which is marketed with Pfizer and generated more than $14 billion last year, is losing exclusivity, while cancer immunotherapy Opdivo is another major medicine approaching patent expiration. More than 65 per cent of Bristol Myers Squibb's 2025 sales are exposed to upcoming patent expirations across its portfolio, while Eliquis alone represented around 13 per cent of Pfizer's pharmaceutical sales last year.

Novo Nordisk faces an even larger long-term concentration risk. Around 77 per cent of the sales it generated in 2025 are associated with products expected to lose patent protection by the end of 2033, with much of the exposure linked to Ozempic. The diabetes blockbuster generated nearly $20 billion last year. Patent timelines differ considerably between countries, however, and the main semaglutide patent has already expired in markets including India and Canada while important protections continue elsewhere.

Why a patent cliff can wipe out billions

Pharmaceutical economics differ fundamentally from most consumer industries. Developing a successful medicine can take years of research, clinical trials and regulatory approvals, but patents provide manufacturers with a period during which competitors cannot simply market equivalent versions of the protected medicine.

Once that protection ends, generic versions of conventional medicines or biosimilars of biological medicines can enter. Competition can rapidly reduce prices and erode the original manufacturer's market share.

The decline is not always immediate. Companies frequently hold multiple patents covering formulations, manufacturing processes, dosages, delivery devices and specific uses of a medicine. Litigation and negotiated settlements can therefore delay full competition well beyond the expiration of a principal patent.

Bristol Myers Squibb's Revlimid illustrates how the process can unfold. Its underlying patent expired in 2019, but settlements with generic manufacturers restricted US competition for years. Limited generic entry began in 2022, while unrestricted competition arrived only in January 2026. Outside the US, where generics entered without similar volume restrictions, branded Revlimid's international sales fell more than 60 per cent during the first year.

Biologics make this cliff different

The coming patent cycle is also different from earlier waves because a large proportion of the medicines involved are biologics — complex drugs produced using living systems rather than relatively straightforward chemical compounds.

That makes copying them substantially harder. Instead of conventional generics, competitors must develop biosimilars and demonstrate that their products are highly similar to the original biological medicine without clinically meaningful differences.

This requires significantly greater investment, sophisticated manufacturing facilities and regulatory expertise. Consequently, the erosion of an originator biologic's sales can be slower than the collapse often seen when multiple conventional generics enter the market.

Even so, regulators in major markets have been seeking to streamline biosimilar development, potentially making competition more intense as major biological drugs lose exclusivity.

Drugmakers open wallets for acquisitions

The looming revenue gap is already reshaping pharmaceutical dealmaking. Major companies are buying biotechnology businesses, licensing experimental drugs and forming research partnerships in an effort to build the products that could replace ageing blockbusters.

Pharmaceutical companies spent around $114 billion on deals during the latest quarter, according to LSEG data — the highest quarterly figure since 2019. Merck, AbbVie and GSK have each announced transactions valued above $5 billion this year.

Biotechnology companies developing promising medicines have consequently become attractive acquisition targets. Private investment is also returning to the sector, with biotech and pharmaceutical businesses raising nearly $15 billion during the June quarter, the strongest showing since 2021.

Merck's partnership with Moderna illustrates what is at stake. Positive late-stage results from the companies' experimental personalised cancer vaccine provided investors with evidence of a potential future revenue source as Keytruda approaches its loss of exclusivity.

Indian pharma sees a $3-5 billion opportunity

For Indian pharmaceutical companies, the global patent cliff represents an opportunity rather than primarily a threat. A CareEdge Ratings assessment estimates that medicines generating about $142 billion in 2025 sales are due to lose exclusivity between 2026 and 2030.

After allowing for the sharp price erosion that normally follows generic competition, CareEdge estimates the addressable opportunity could still exceed $30-40 billion over five years, with Indian pharmaceutical companies potentially capturing $3-5 billion.

Indian companies are particularly interested in oncology and immunology, which account for a large portion of the medicines approaching patent expiry. Companies including Dr Reddy's Laboratories, Sun Pharma, Lupin, Zydus Lifesciences, Intas and Natco are positioning themselves for opportunities in complex generics and biosimilars.

Keytruda is emerging as one of the most closely watched targets. Indian companies have begun preparing biosimilar programmes ahead of the drug's loss of protection in major markets from 2028-29.

The opportunity is substantial but considerably more demanding than India's traditional generics business. Developing a biosimilar can require hundreds of millions of dollars and years of clinical, manufacturing and regulatory work, putting greater emphasis on technological capability rather than simply low-cost manufacturing.

Semaglutide shows what happens after patents expire

India is already seeing an example of how a blockbuster patent expiry can transform a market. The principal Indian patent covering semaglutide — the active ingredient used in Novo Nordisk's Ozempic and Wegovy — expired on March 20 this year, clearing the way for domestic competitors.

Indian pharmaceutical companies had spent years preparing products ahead of the expiry, with multiple manufacturers moving to introduce lower-priced semaglutide versions. Greater competition is expected to substantially reduce treatment costs and broaden access to GLP-1 medicines used for diabetes and obesity.

That combination of falling prices and rapidly expanding patient access explains why patent cliffs have two very different meanings. For an innovator losing exclusivity, they can erase billions of dollars of revenue. For generic manufacturers, healthcare systems and patients, they can create competition and sharply reduce the price of important medicines.

The approaching global cliff therefore represents more than a corporate earnings problem. It could redraw competitive positions across the pharmaceutical industry, accelerate mergers and acquisitions and make some of the world's most important medicines significantly cheaper. For Indian drugmakers, the next five years could also determine whether the industry can successfully move from its traditional strength in conventional generics towards the far more technically demanding — and potentially lucrative — global biosimilars market.