PatSnap insights (Pfizer’s Viagra patent expires)

The patent expired in Europe, Japan and Australia in 2012, and as an indicator to what is to come for Pfizer in the United States; between 2012 and 2015, Pfizer’s annual revenue from Viagra sales had decreased in these regions from US$472 million to US$146 million. Pfizer recently signed an agreement with Teva Pharmaceuticals, in which Teva can begin to market the US’ first generic version of the drug from December 2017. But how large will the impact of this particular patent expiry be, is Pfizer prepared, which companies will suffer, and which will prosper?

Posted September 11, 2017

Through PatSnap’s data and analytics, we have provided a deeper look into the innovation landscape for Pfizer, its competitors, and the potential effects on the market for erectile dysfunction treatment. The key findings include:

• Pfizer is not the only company that will experience significant revenue loss due to the expiry of the patent.
• Data shows Pfizer is looking to replenish revenue pipeline with innovations in treating cancer, stroke, embolism and deep vein thrombosis.
• Some of the big pharmaceutical patents set to expire within the next 15 years include Zytiga, Gleevec and Megace ES.
• New innovations including treatments for non alcoholic fatty liver disease and traumatic brain injury are some of the other applications that innovative companies are looking at for the use of the chemical found in Viagra.

Pfizer’s current innovation portfolio

Pfizer’s patent portfolio is expectedly vast, with 72,319 patents at the time of writing (10.62% active, 86.45% inactive & 2.93% pending). This is a result of Pfizer’s long-standing dedication to innovation; US$7.87 billion spent on R&D in 2016, which makes up almost 15% of its annual revenue. It is also geographically diverse, with only 8.49% of all patents filed in the United States.

Through PatSnap data (Figure 1), we can see that since the late 1990s-early 2000s, Pfizer’s rate of patent applications has drastically reduced. Despite this, the rate that its patents have been granted have remained relatively constant, meaning the ratio of its patent applications to granted status has improved considerably. This suggests Pfizer has overhauled its R&D practice since the early 2000s, resulting in a more streamlined process from R&D to commercialisation.

From further PatSnap analysis (Figure 2), Pfizer’s patent renewal rate has been improving since 2010, with increasing renewal vs abandon rates for its IP. Additionally, in 2006 – the same year Pfizer announced the sale of its consumer healthcare unit to Johnson & Johnson, it began a large-scale offloading of its intellectual property. This highlights that Pfizer perhaps began a much more selective and streamlined approach to its IP strategy.

Competitors with the most similar patent portfolios to Pfizer

The expiry of Pfizer’s Viagra patent will have a ripple effect on those companies invested in erectile dysfunction treatment. PatSnap analysis shows that the following companies with the most similar overall innovation portfolio to Pfizer closely correlate to those which will be most affected by the expiry of Pfizer’s Viagra patent.

• Eli Lilly & Co.
• Sanofi
• GlaxoSmithKline
• Solvay Pharmaceuticals
• Teva Pharmaceuticals

Companies with most patents citing PDE 5 Inhibitor (2,220 patents in total)

The Viagra treatment belongs to a family of inhibitors called the phosphodiesterase type 5 (PDE5) inhibitor, which is most commonly associated in the treatment of erectile dysfunction. PatSnap data reveals the companies with the most patents citing the PDE5 inhibitor.

• Pfizer (198)
• Astrazeneca (151)
• Bayer Pharmaceuticals (66)
• Merck (66)
• Bristol-Myers Squibb (55)

These companies own intellectual property that will be very closely linked to the treatment of erectile dysfunction and pulmonary hypertension, and are likely to see part of their IP portfolio value affected due to the expiry of Pfizer’s Viagra patent.

Competing erectile dysfunction treatments, and associated companies

To understand more closely which companies will be affected most by the expiry of Pfizer’s Viagra patent, below is a list of the most well-known competitor drugs, also PDE5 inhibitors for the treatment of erectile dysfunction, along with their trademark names and commercially associated companies.

• Avanafil – Trademark: Stendra. Commercially associated companies include Vivus Inc. and Menarini Group.
• Sildenafil – Trademark: Viagra. Commercially associated companies include Pfizer and Teva Pharmaceuticals.
• Tadalafil – Trademark: Cialis. Commercially associated companies include Eli Lilly & Co. and Tadacip.
• Vardenafil – Trademarks: Levitra, Staxyn & Vivanza. Commercially associated companies include Bayer Pharmaceuticals, GlaxoSmithKline and Schering-Plough.

The expiry of the Viagra patent, and the resulting generic Sildenafil Citrate medication expected to flood the market, is likely to increase the market for erectile dysfunction treatment due to the drastically reduced cost, as well as shrink market share for the competing treatments on the market. Alternative treatments that have differentiated themselves as medically superior will be least affected.

Future of Sildenafil Citrate

Aside from the generic availability of Sildenafil Citrate for the treatment of erectile dysfunction, there are a number of different applications for the drug being used in the pharmaceutical industry, including non alcoholic fatty liver disease and traumatic brain injury. Pfizer and other pharmaceutical organisations are looking to make sure that the full value of the drug for medical purposes is being made use of, and even long after a previously patented drug has been made generic, organisations may find a new use for it and apply for a patent for it.

Next blockbuster patents set to expire

In the pharmaceutical industry, organisations know they need to innovate in order to survive and stay ahead of the game. Almost every expensive drug around today will be made available as a generic drug somewhere down the line. That’s good news for the consumer, however the patent owners will need to replace that revenue somehow. Below are a few of the highest grossing drugs that their patents are expected to expire within the next fifteen years.

• Gleevec: A cancer treatment drug owned by Novartis, generating US$4.65 billion revenue in 2015. Expected to expire 2022.
• Prasugrel: A blood-clot treatment drug owned by Eli Lilly, generating US$121.8 million in Q1 2015. Expected to expire 2023.
• Megace ES: Anorexia treatment drug owned by Par, achieving US$70 million in 2006 (recent figures not available). Expected to expire 2024.
• Zytiga: A prostate cancer drug owned by Johnson & Johnson, generating US$2.2 billion in 2015. Expected to expire 2027.
• Lupron:: A cancer treatment owned by AbbVie, generating US$821 million in 2016. Expected to expire 2031.
• Ibrutinib: A blood cancer drug owned by Pharmacyclics and Johnson & Johnson, generating US$1.8 billion in 2016. Expected to expire 2031.

In Pfizer’s case, Viagra is an iconic drug that generates a significant amount of money each year. It has managed to extend the length of the patent expiry a number of times, however its ownership over the patent is finally coming to an end, and it is investing a huge amount in innovation – almost 15 percent of its annual revenue.

Pfizer will be taking plenty of precautions in order to offset the losses, and will be well placed to continue business when the patent does expire. Pfizer is not the only affected company, however, and those also invested in competitive erectile dysfunction treatments will likely see their revenues impacted as well.