Turning the Patent Cliff into an Innovation Launchpad

The pharmaceutical industry is facing a 'patent cliff,' with expiring patents on blockbuster drugs driving significant revenue losses. As patents expire, the market is flooded with generic and biosimilar alternatives, resulting in a steep declines in sales for the original drug manufacturers. Between 2025 and 2030, patents on drugs generating over $250 billion in annual sales are set to expire. To navigate this disruption, leaders must adopt a multi-pronged strategy focused on innovation, diversification, and digital transformation.

Here are key strategies to effectively navigate the patent cliff:

Invest in Research and Development

A robust R&D strategy is essential to replenish the sales pipeline and sustain long-term growth. Companies should prioritize therapeutic areas with high unmet medical needs, where innovation can deliver both clinical impact and market differentiation.

One way to accelerate R&D is integrating AI and machine learning into drug discovery. These technologies enable the rapid analysis of complex datasets, the identification of promising compounds, and the optimization of clinical trial design—reducing time-to-market and development costs.

Strategic partnerships with academic institutions, biotech firms, and research organizations can further accelerate innovation. These collaborations provide access to specialized expertise and shared infrastructure, fostering a more agile and productive R&D ecosystem.

Key Actions:

• Focus R&D on high-potential therapeutic areas.
• Use AI/ML to streamline drug discovery and development.
• Partner with external innovators to expand capabilities.

Industry Example:

AstraZeneca has successfully navigated the patent cliff by concentrating on high-growth therapeutic areas. Notable examples include oncology with Tagrisso for lung cancer, respiratory with Symbicort, and cardiovascular diseases with Farxiga. The company invests approximately 20% of its revenue into R&D, prioritizing innovative treatments such as biologics and cell therapies, while also leveraging AI technologies to accelerate drug discovery. In addition, strategic acquisitions—most notably the 2021 acquisition of Alexion—have strengthened AstraZeneca’s portfolio in rare diseases.

Diversify Product Portfolio

A diversified product portfolio adds resilience to by expanding your customer base and reducing market saturation. Reducing reliance on a few blockbuster drugs requires a deliberate expansion of the product mix. This can be achived through several avenues:

• Combination therapies that offer enhanced efficacy and differentiation.
• Entry into new therapeutic areas and geographies with growth potential.
• Development of personalized and targeted treatments tailored to specific patient populations.

These strategies not only mitigate risk but also open new revenue streams and strengthen market positioning.

Key Actions:

• Develop combination therapies with superior outcomes.
• Expand into underserved market**-/s and therapeutic categories.
• Invest in personalized medicine to improve patient outcomes.

Industry Example:

Roche has effectively applied these strategies by developing combination cancer therapies such as Perjeta and Herceptin for breast cancer. The company has also expanded into the immunotherapy space with Tecentriq, and made significant investments in personalized medicine through its subsidiary, Foundation Medicine, which offers comprehensive genomic profiling to support informed treatment decisions.

Enhance Lifecycle Management

Maximizing the value of existing products is critical during and after patent expiry. Lifecycle management strategies include:

• New indications for existing drugs to broaden their clinical utility.
• Improved formulations that enhance safety, efficacy, or convenience.
• Patent extensions and exclusivity arrangements through regulatory pathways.

Real-world evidence and big data analytics can support these efforts by demonstrating continued value and securing reimbursement.

Key Actions:

• Extend product use through new indications. 
• Improve formulations for better patient experience. 
• Secure regulatory exclusivity to prolong market presence.

Industry Example:

Johnson & Johnson has effectively implemented lifecycle management strategies by introducing new indications for its renowned drug, Remicade, and securing patent extensions to maintain market presence.

Collaborate with Generic and Biosimilar Manufacturers

Strategic alliances with generic and biosimilar manufacturers can turn competition into opportunity. Co-development and co-marketing arrangements allow originators to retain market share while expanding access.

Licensing agreements provide a steady revenue stream, while shared manufacturing and distribution capabilities enhance efficiency and scalability.

Key Actions:

• Form alliances to co-develop generics and biosimilars.
• Use licensing to maintain revenue and market presence.
• Leverage partner infrastructure for cost-effective delivery.

Industry Example:

Pfizer’s collaboration with Mylan to establish Viatris reflects a strategic focus on delivering lower-cost alternatives to patients worldwide. By leveraging extensive infrastructure and deep expertise, the partnership aims to enhance access to affordable medicines while maintaining high standards of quality and innovation.

Expanding into Emerging Markets

Emerging markets offer significant growth potential, especially for cost-effective therapies. Success requires:

• Affordable pricing models aligned with local economic conditions.
• Regulatory navigation through collaboration with local stakeholders.
• Building relationships with healthcare providers and government agencies to ensure market access and adoption.

Key Actions:

• Tailor pricing to local affordability.
• Partner with local stakeholders to ease market entry.
• Expand access to underserved patient populations.

Industry Example:

Strengthening Intellectual Property Strategies

Protecting innovation is fundamental to sustaining competitive advantage. Companies must implement:

• Robust patent filing and prosecution to secure broad claims. 
• Active IP monitoring and enforcement to prevent infringement. 
• Litigation and dispute resolution to defend exclusivity.

These measures ensure that proprietary technologies remain protected and monetizable.

Key Actions:

• File strong, defensible patents.
• Monitor and enforce IP rights.
• Defend exclusivity through legal channels.

Industry Example:

Pfizer has employed robust intellectual property (IP) strategies effectively to maintain its competitive advantage. By securing comprehensive patents for its blockbuster drug Viagra and vigorously defending its IP rights through litigation, the company was able to extend its market exclusivity, reinforcing its leadership in the pharmaceutical space.

Embrace Digital Transformation

Digital technologies are reshaping every aspect of pharma operations. Key areas of impact include:

• Clinical trial optimization through predictive analytics and AI.
• Patient engagement via digital health platforms and remote monitoring.
• Smart manufacturing and supply chain automation to improve agility and reduce costs.

Digital collaboration tools also foster innovation and accelerate decision-making across global teams.

Key Actions:

• Use AI to enhance clinical trial design and execution.
• Improve adherence and outcomes with digital health tools.
• Automate operations for efficiency and scalability.

Industry Example:

Novartis has leveraged advanced AI and machine learning technologies to optimize its drug discovery and development processes, significantly reducing both time and costs. Through partnerships—such as with RetinAI—the company has integrated digital health platforms and wearable devices to enhance patient monitoring and engagement, resulting in improved treatment adherence and clinical outcomes.

Conclusion

By investing in innovation, diversifying portfolios, extending product lifecycles, and embracing digital tools, pharmaceutical companies can not only mitigate risk but unlock new growth opportunities.

A comprehensive strategy that integrates R&D, partnerships, market expansion, and IP protection will position companies to thrive in a post-patent landscape. The future belongs to those who innovate boldly, collaborate strategically, and execute with agility.

About the Author

Sanjay Martis
Senior Partner and Head of Life Sciences, North America, Wipro Consulting

Sanjay brings over 30 years of experience in commercial life sciences, both as a practitioner and as a consultant. A seasoned senior executive, Sanjay has extensive expertise across the international life sciences sector, including information technology, pharmaceuticals, biotechnology, and medical devices.